For many people, hobbies are a great way to wind down and relieve some of the stresses that are common for those who juggle working, families and friendships. Those with lots of commitments may enjoy the chance to do something just for themselves, and many people enjoy doing something creative in their free time to give themselves an outlet for their ideas.
While some hobbies have minimal requirements, others can have almost unlimited amounts of equipment or accessories that can be costly. For those who want to make the most out of their hobby without their finances taking a hit, it can be hard to allocate an appropriate budget that allows for fun but doesn’t impact on other financial commitments.
Saving and spending can be a delicate balance, but even the thriftiest person needs to spend something on themselves. Working out a budget to spend on hobbies is the ideal way to ensure that you have the funds for everything you need with some reserved for fun as well.
How to draw up a household budget
Financial matters are often seen as complicated and impenetrable, but once you understand the basic principles, it is easy to organize your finances. The first step is to work out how much you have to allocate, so start with your income and include all the household earnings including wages, investments and any other regular income such as benefits or tax credits.
Then, you need to calculate the total of all your outgoing payments, which will include costs such as:
- Housing – rent, mortgage payments and any local taxes levied on your home
- Utilities -electricity and water, gas, heating oil, telephone and internet
- Insurance – include car, buildings, contents, health, life and any critical illness cover
- Debt servicing – if you have loans, credit cards, or student finance, then include your monthly payments
- Travel – include the costs of traveling to work, either by public transport or in fuel costs for your own vehicle, and add any regular travel costs to visit family and for other trips
- Food and staples – calculate your monthly spend on food and other household items such as cleaning supplies and toiletries
- Childcare – Nursery, preschool, after school and any other childcare costs
- Pet care – Food, insurance, vet bills, grooming
- Entertainment – television packages, magazine subscriptions, eating out and any other regular expenses
- Other things – from pension contributions to gym memberships, any other regular costs need to be included
It can be hard to remember everything you spend money on, so check your bank statements to help you account for everything. For annual costs, divide by twelve to include them in your monthly budget.
You may wish to allocate some money towards savings, whether you want a house deposit, an extension or the holiday of a lifetime. It is much easier to accrue money if you put it into a savings account at the beginning of the month, instead of hoping to have money ‘left over’ at the end of the month.
Allocating money for hobbies
Once you have calculated your income and outgoings, you will know how much you have to spend on your hobbies. If you share your finances, you may find it helpful to have a joint account for household expenditure and separate accounts for your personal spending so that you have an idea of how much you can spend on yourself.
The type of hobby you enjoy may help you decide the best place to keep your money – if you make lots of online purchases for your hobby, then you may want to use a credit card to protect your purchases. For example, if you play online blackjack, you can use a variety of different deposit methods to fund your account, so keeping a separate account could help you keep track of your stake money and winnings.
If you have a hobby that requires expensive equipment, then you can use a variety of different methods to help you save up what you need. Some bank accounts even include ways to help you save, allowing you to round up your spending to the nearest pound and save the extra, ring-fence spending for different purposes, or offer special rates on savings.
There’s no single best way to save for your hobbies – different things work for different people, so be realistic about the way that is likely to work best for you. Some people prefer to have different accounts to help them keep track of their funds, whereas others like to manage their money from a single account and see everything in one place.
Whichever way works best for you, allocating money for your hobbies will help you to keep to your household budget while still having plenty of fun.
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