Our passions are what makes us unique, everyone needs some form of outside interests but we have to be aware of how much it is costing us and whether the money spent on them is affecting our financial future. We need to keep a lid on the amount of money we are spending on our recreation as it could cost us in the long term.
Are your hobbies costing you an arm and a leg
By R.A.Stewart
Hobbies can give us a sense of release from our day to day issues; the satisfaction one gets from pursuing a pleasure whether it is collecting stamps, bank notes, beer labels, or any of the stuff which people describe as collectable, boating, sport, car racing, or whatever.
If you are going to have a hobby you really need to make sure it is not costing you more than what you can afford and that it is not at the expense of your retirement fund.
There are ways of keeping costs down with your hobby; take whatever it is you collect. You can list your duplicate items on ebay or other auction sites. It will also give you an estimate of the kind of demand there is for your particular kind of collectable.
It is also important to realise that something is only worth whatever someone else is prepared to pay for. If you cannot find a buyer for whatever your collection is then it is not worth anything.
There are some things that are sentimental however, things which may not have any monetary value but are priceless to family such as old photographs or heirlooms.
These may not have cost you anything to acquire as they may have been handed down through the generations or have been given to you but that is not so with a lot of collectables which are acquired with a passion which can be described as hoarding.
Unless someone has an unlimited amount of spending money all of this stuff must be at the expensive of something.
People will often go without to finance their hobby such as not owning a car, not contributing to their retirement fund, or not spending money on much needed house repairs.
A collector who owns a huge collection of beer labels, 30,000+ I believe proudly boasts about it to everyone who visits. It is anyone’s guess how much he has spent acquiring this collection but the saddest thing is that he is not contributing to his retirement fund and therefore missing out on the government incentives.
The old excuse of “I might die before retirement and so someone else will get my money,” has been used several times, but then someone else will inherit his beer label collection and if something financial crops up such as a huge medical bill he will not be able to afford it, and it is doubtful if he would be willing to part with his collection even if a lot of money was offered for it.
The same is said for any other activity that is a hobby. The old saying of “Pay yourself first” rings true because sooner or later a person who mismanages their finances will eventually find that it catches up on them.
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Robert Stewart publishes a blog with articles about personal finance. Check it out on www.robertastewart.com
It pays to keep tabs on your discretionary spending