How Much Money Should I Spend on my Hobbies?

Most of us have hobbies and most hobbies cost money. However, it can be difficult to know how much we should spend on our hobbies. With some hobbies it can be too easy to get carried away and spend a lot of money and if you do not set a limit then it can be hard to know when to stop. With something that is fun and relaxing we can think of it as important. However, you do not want it to be something that will be a cause of stress because you have spent more money on it than you can afford, then it will no longer be relaxing or you may be worried when you think about your finances which will overall mean that you are less relaxed.

How much we spend should be determined by how much we can afford and by how much we can use. It is worth giving both of these some thought to make sure that our spending does not get out of control.

How much can I afford?

It is really important to make sure that you work out how much you can afford to spend and set a budget. You do not want to have to get a loan via sites like Boutell Loans UK to pay for something that you do in your spare time. Therefore, you need to be careful and work out what you can afford. It should be quite straightforward to calculate. All you will need to do is to look back on past bank statements and see what money you have available once all of your necessities are paid for. This could differ month to month depending on what you have to spend each month. Therefore, it could be worth noting the amounts so that you are aware that you may not be able to buy items or so many items in particular months.

It may even be the case that you will need to save up if you want to buy certain items. Perhaps you will need to resist spending for a few months so that then you will have enough to make a big purchase. This could be tricky but if you have a hobby which requires the purchase of really expensive items but it could be the sensible thing to do. It is even wise to write down your planned purchases and how much they will cost and then think about prioritising them based on what you can afford. You might rather hold off all purchases until you can afford a certain think or you may rather make some smaller purchases so that you are still having some treats, even if they are not the thing that you want the most.

How much can I use?

This refers to buying things that you do not get use from. For example, if you knit as a hobby and you keep buying pretty wool, you may find that you get so much that you cannot possibly knit it all into things. It is probably best just to buy enough for a few projects and then wait to get more. You may find that if you resist purchasing things there may be even nicer things available when you do decide to get some. If your hobby is sport then you can only wear a certain amount of sportswear at one time or have the time and stamina to attend a certain amount of classes.

Whatever your hobby there will be limits in what you can use so be wise with what you buy. If you are the sort of person who gets bored with a certain thing and so goes onto something else quickly then be even more cautious. This is because you could end up buying things and then never using them which is wasteful. Even if you give them away or donate them to charity you will still have spent money that you may have been better off spending elsewhere.

It can be difficult at times to limit our spending particularly on out hobbies. Our hobbies are what we use to relax and enjoy ourselves and so cutting back spending here can feel like a real punishment. However, it is wise to remember that you should still be able to continue with the hobby even if you have to wait a while before you can purchase things. Or you may need to consider getting a cheaper hobby so that the cost is not so much of a problem. If your hobby is foreign travel, extreme sports of collecting vintage cars then it will cost a lot, but if you take up something like walking, art or watching television, then it will be a lot cheaper. So, it is worth not only making sure that you budget but also thinking about whether you should consider changing hobbies so that they are more easily affordable.

Should I get a Mortgage?

Getting any loan is a big step but getting a mortgage is really the biggest of them all. This is because it is usually for a larger amount of money than other loans. It also tends to last a long time – typically around 25 years and so it is a really big commitment. However, there are advantages to owning your own home which is why many people would like to. It is worth asking yourself a few questions to make your decision easier.

Can I afford the repayments?

It is good to start by thinking about the repayments on the mortgage. As you will be likely to be borrowing a significant sum of money then the repayments could be quite high. While interest rates are low at the moment, you may find it manageable but it is wise to also think about whether you will be able to manage the repayments if those interest rates go up. They may not go up for a while but it is bets to be prepared and think about what you would do if they did go up.

It is also worth just doing some sums and making sure you will always be able to afford them now. You might have some months that are more expensive than others, for example and that could mean that you will need to make sure that you can afford those. It is wise to actually look at your bank statements and work out what you can normally afford and if it will work for you. If you normally pay rent and the mortgage is a similar amount then this could be something that could help your confidence as long as you are always able to pay your rent on time.

Do I want to stay in one place?

It is worth thinking about whether you are ready to put your roots down in one place. If it is likely that you might travel to a s different part of the country or the world for work, for example then it might not be a good time to buy. If you do decide to move, then you have the hassle and expense of selling the house which could make things difficult. Of course, you could rent it out if you travel but that can also come with problems. You will have to change your mortgage to a buy to let mortgage and that will usually have a much higher interest rate so could be a lot dearer for you. You will also need to find tenants and you might need to pay a letting agent. There are also all sorts of safety checks that have to take place before you can rent out a property.

Will I have a regular income?

It is worth thinking about whether you feel that you will have a regular income for the whole term of the loan. It can be tricky predicting what might happen twenty years form now but it is still worth some thought. If you are in a trade or career that you feel will last then you can be surer that you will be employable. If you work for a company that is doing well then you can be surer that you will still have a job. The same goes for the industry that you work in. For example, IT support is something that is likely to be in high demand into the future but if you work on a production line then there is a chance that your job could be taken by a robot.

What financial difference will it make?

It is also worth thinking about what difference it will make to you financially in the long term and short term. Firstly, rent tends to be dearer than mortgage repayments so that can be a saving. However, you will have to pay for life insurance and buildings insurance as your mortgage provider will insist on it. You will also be responsible for any repairs and decorating that is needed on the property which could be expensive. The freedom to be able to do what you want with a property can be great, but this can be expensive.

One huge advantage comes when the mortgage is repaid. Although you will probably still want buildings insurance you will be able to cancel the life insurance if you wish. You will have no mortgage or rent to pay out and so you will have the rest of your life in that house without it. This can be especially useful when you retire and you do not have to worry about spending your money on these things.

It is a big commitment and a big decision though. It should be one that you take a lot of time to think about and it could be useful to discuss it with your family as well, particularly family members that have mortgages as they will be able to tell you about their experiences.