How Much Should You Spend On Hobbies? A Simple Guide

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From a strictly financial perspective, spending money on hobbies might seem like a waste. But the truth is, hobbies can be a great way to improve your quality of life and maintain your motivation to pursue your financial goals.

Like any other category in your budget, the key is to strike a balance between financial responsibility and spending money on the activities you enjoy.

But how, exactly, do you find that balance?

Well, here are a few tips and guidelines to help you out.

How Much Should You Spend On Hobbies?

As a good rule of thumb, you should allocate 5% to 10% of your take-home pay for hobbies and recreational spending. For example, if you bring home $3,500 per month (after taxes), then you should plan to spend between $175 and $350 per month on hobbies.

Obviously, this is a broad range, and the amount you actually spend will depend on your specific circumstances.

For that reason, you should consider the following factors when deciding how much to spend on hobbies:

Your Current Financial Situation

If you’re already struggling to make ends meet, then it’s probably not a good idea to start spending money on hobbies until you’ve gotten your finances under control.

Even if you’re just trying to save up for a major purchase, like a house or a car, you may want to reduce your hobby spending for a while. Sometimes it’s necessary to make temporary sacrifices in order to reach your long-term financial goals.

On the other hand, if you’re in a good place financially and you have some extra money to work with each month, then there’s no reason why you can’t spend a little bit on hobbies.

Just stick to the guidelines above, and try not to overdo it.

How much to spend on hobbies | Be The Budget

Your Income

If you have a low income, you’ll probably have to limit your spending on hobbies more than someone who brings home a higher salary. For example, someone that earns $10,000 per month, might be able to allocate 10% to 15% of their budget for hobby spending.

Meanwhile, someone that earns $5,000 per month will probably have to place a stricter limit on themself.

Your Financial Goals

If you’re trying to save up for a specific goal, like retirement or a down payment on a house, then you’ll need to be extra careful about your hobby spending.

You might even need to put your hobbies on hold for a while until you’ve reached your target number.

On the other hand, if you’re able to achieve your monthly saving/investing goals, while also spending 10% of your income on hobbies, then you shouldn’t feel guilty doing so.

After all, if you never allow yourself to enjoy some of the money you earn, what’s the point of earning it?

What If Your Hobbies Are Expensive?

Some hobbies are definitely more expensive than others. For example, golfing can be a very costly hobby, especially if you’re constantly buying new equipment and playing at high-end courses.

Meanwhile, other hobbies, like hiking or drawing, tend to be much more cost-effective.

So, what if your hobby is on the expensive side? How do you work the extra cost into your monthly budget? Well, if you want to be financially responsible, you have 2 options: decrease spending in other areas of life, or increase your income.

Or, you could do both.

For example, let’s say you want to take up golf, but between green fees, cart fees, and equipment it costs $300 per month. In order to make room in your budget, you could: start a side hustle to earn some extra cash, cut your food budget, cancel cable and other streaming subscriptions, or maybe even get a part-time job at night.

Ultimately, your goal should be to make room in your budget without having to reduce your monthly savings. That way, you can freely pursue your hobby without harming your financial future.

How To Handle An Expensive Hobby: 5 Financial Tips

 If you’re trying to fit an expensive hobby into your budget, I do think there are some general guidelines that can be helpful. In fact, here are 5 financial tips for handling an expensive hobby:

1) Live On A Written Budget

If you don’t have a budget, now is the time to create one. Having a budget is critical if you want to get your finances in order and make room for an expensive hobby.

I recommend using a zero-based budget, which is basically just the process of budgeting every dollar of your income until you have $0 left to budget.

This kind of specificity in your budget will help you figure out exactly where your money is going each month, and how much you can afford to spend on things like hobbies.

2) Put Your Long-Term Goals First

As hard as it can be when your passionate about a hobby, it’s important that you continue to put your long-term financial goals first.

For instance, if you’re trying to save up for a house or retirement, make sure you’re putting away enough money each month to reach those targets. Then, and only then, should you start spending money on your hobbies.

While hobbies and passions are an important part of your financial journey, they shouldn’t cause you to derail your long-term financial progress.

3) Know (And Avoid) Your Spending Triggers

When you’re passionate about an expensive hobby, it’s easy to justify all sorts of impulsive spending. And the worst part is, you might not even realize you’re doing it.

This is why it’s important to know your spending triggers, so you can be aware of your impulsive behavior and work to avoid it.

Some common hobby-related spending triggers include: feeling like you need the latest and greatest equipment, online shopping when you’re bored, or even spending too much time around people that spend a lot of money on the same hobby.

Spending triggers can come in all sorts of shapes and sizes. So, do your best to identify the situations in which you are most likely to spend money on your hobby. Then, create a plan to help you avoid making an irresponsible spending decision.

4) Reduce Your Fixed Expenses

If you want to make more room in your budget for your hobbies and passions, one of the best things you can do is reduce your fixed expenses.

What is a fixed expense, you ask?

A fixed expense is any bill that you have to pay at a consistent interval (usually monthly), regardless of your income or spending habits. Some common examples of fixed expenses include: rent, mortgage payments, car payments, insurance premiums, and student loan payments.

While you might not be able to get rid of all of them, there are plenty of ways to reduce the overall amount of money you spend on fixed expenses each month.

For example, you could pay off your car loan in order to eliminate your monthly car payment. You could call your various insurance providers and look for ways to reduce your monthly rate. If you want to get really extreme, you could even sell your house and move into a smaller, less expensive home.

It really just depends on how passionate you are about your hobby, and what you’re willing to sacrifice in order to make room for it in your budget.

5) Create A Sinking Fund For Your Hobby

Last but not least, one of the best financial tips for dealing with an expensive hobby is to create a sinking fund for it.

A sinking fund is just a fancy name for an account that you use to save up money for a specific purpose. So, in this case, your sinking fund would be used to save up money for your favorite hobby.

Your hobby fund (as you might call it), is particularly beneficial if your hobby is something that requires expensive equipment or takes place far away from home.

To use a previous example, let’s say you’re an avid skiier. You might create a sinking fund specifically for your winter ski trips. That way, when the snow starts to fall, you’ll have the money you need to hit the slopes without hurting your budget.

Oh, and if you’re going to create a sinking fund, I highly recommend setting it up through a savings account at a completely different bank than you normally use. This will reduce your temptation to spend the money frivolously, and help you keep the funds separate from your other savings goals.

Bottom Line

When it comes to spending money on a hobby, you need to consider your overall financial situation, your monthly budget, and your long-term financial goals.

That said, if you handle your money wisely, and follow the tips in this article, there’s no reason you can’t find room in your budget for the hobbies and passions you love.

What do you think? How do you handle your hobby-related spending? Do you have any tips to share? Let us know in the comments below!

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About The Author

About The Author

Zach Buchenau is a self-proclaimed personal finance nerd. When he isn't writing about budgeting, getting out of debt, making extra money, and living a frugal life, you can find him building furniture, fly fishing, or developing websites. He is the co-founder of BeTheBudget, and Chipotle's most loyal customer.

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