How Much Money You Should Spend on Hobbies
A Consumerism Commentary reader wrote in with a simple question which should have a simple answer: What percentage of income should a person spend on hobbies? I enjoy talking about hobbies. I have a wide variety of interests, and many of these have little prospect of making money for me for the time being. This is a great question. There are a number of factors someone should consider when deciding how much money to spend on activities that don’t generate any income.
Although a hobby doesn’t generate income now, it might surprise you in the future. I started writing Consumerism Commentary as a hobby, without any thought of being able to earn money from a blog. Now my hobby has become my primary source of income — and it’s great being able to earn money doing something I enjoy.
On the other hand, I’ve spent money on photography, and that hasn’t generated much in the way of financial return for me yet. I expect this is the type of of hobby the reader might be thinking about. It’s not an issue of how much of your income you can afford to spend on a hobby because that will depend on your necessary expenses. If your after-tax income is already dedicated 30% to your mortgage, 20% for food, 20% for utilities, 10% for transportation, 10% for saving for the future, and 5% for paying off debt, you only have 5% left to play with before tapping the income you’ve dedicated to your future.
I wholeheartedly believe that life is about living and that it’s always worthwhile to spend time and some money on activities that make you happy. It’s not always easy, though, when your concern is making all the bills and having enough left over to build a future. If you have excess income after meeting your obligations including saving, using 50% of whatever is left for your hobbies can’t hurt.
Some hobbies are more expensive than others, so find ways to achieve the same level of enjoyment through spending less money. Taking a frugal approach to the activities you enjoy can help the money you set aside for hobbies last longer. If you like photography, buy used cameras and lenses. If you write short science fiction stories, put off the new computer purchase and skip Dragon-Con for a year.
There is no good answer in terms of percentage of income. When it comes to activities that add joy to your life, spend as much as you want as long as it’s not detrimental to your current or future financial situation.
After paying for all your necessary expenses and after saving for the future in line with your goals, spend anything that’s left over on activities you enjoy. That may be 1% of your income or 10%, but as long as you’re not putting your future in jeopardy, you need to enjoy the time you have.
Readers: how much of your income do you spend on your hobbies?