One of the core principles that guides my financial life is the idea of finding the best “bang for the buck” for every dollar I spend. I try to seek out products that have the features I actually need for the lowest price, and I also consider things like the time cost of reusing things or the time cost of stopping at another store to save $5.
In terms of stuff where I’m almost entirely concerned with function, this is actually pretty easy. For example, what do I want out of a kitchen garbage bag? I want one that doesn’t rip with any consistency and allows me to carry my trash out to the trash can with minimal effort. What’s the cheapest bag I can get that fulfills those needs? That’s the bag I buy and keep buying.
Where things get trickier is when we move away from things that are needs (or nearly needs) into things that are pretty clearly “wants,” like entertainment and hobbies. How exactly do I figure out “bang for the buck” for those non-essential things that are mostly just there to provide pleasure and improve the quality of my leisure time?
It’s a question that I struggle with a lot. I budget a certain amount each month for hobby and entertainment spending for myself, and I want to be sure I’m getting the most value out of those dollars. How do I do that?
I’ll be the first to admit that I don’t have a perfect solution to these questions, but I have figured out a few things along the way. Here are some of the techniques I use to make better choices with my entertainment and hobby dollars, even if they’re not necessarily perfect choices.
The cost of an hour of quality leisure
One of the first things that I like to think about is when I buy an item for my hobbies or for entertainment, how many hours of enjoyment am I going to get out of that item?
For example, let’s say I buy a book and read it once. I’m going to get five to twenty hours of enjoyment out of the book (depending on the length). If that book costs $10, then I’m spending somewhere between $0.50 and $2 per hour for enjoyment. If I check it out from the library instead, that cost goes to “free,” but then I’m restricted by the need to return it to the library.
However, if I buy a book just to put it on the shelf and never read it (or to just leave it on my Kindle), the cost per hour of enjoyment is infinite.
Let’s look at another example. Let’s say I buy a board game that takes an hour to play and I play it five times. The game cost $20, so I get $4 per hour of enjoyment from that game. (However, I’m active in local game trading, so I’m likely to trade that game for another one, and keep doing so until I find one that I think I’ll consistently play for many years to come, so the real cost of a game I actually play is usually much lower than $4 per hour.)
However, if I buy a game just to put it on my shelves and never read it, then the cost per hour of enjoyment is infinite.
As a frugal person, I want that “cost per hour of enjoyment” to be as low as possible. So, for that to happen, I need to be spending my entertainment and hobby dollars on things that I’m actually going to use and enjoy. If I spend it on things that I just stick on a shelf, that’s a gigantic waste of money.
So, unless something is truly a rare find, I leave it on the shelf unless I’m highly confident I’m going to use it in the near future. I can always buy it later if I’m ready to actually enjoy that item.
Rule #1 – Don’t buy stuff that you’re not absolutely sure you’re going to use.
You don’t have time for everything
If I have an hour or so of free time to myself, I’m likely to read a book, unless the weather is nice, in which case I’ll go outside and probably go on a walk.
If I have two or three hours of free time, I’ll go to a park and go on a hike if the weather is nice, or play a board game if it’s not nice. The presence of other people might sway this; I might end up enjoying a board game with them or watching a movie with them or something.
If I have a free afternoon, I’ll often cook something or prepare some food and beverage items for the future. I’ll make a batch of homemade sauerkraut or a batch of homemade beer. If I have friends around, I’ll play a long board game with them if they’re interested.
In other words, what I begin to notice is that I definitely have a hierarchy of things I like to do in my spare time.
If I have adequate time, I’m likely to prioritize some sort of food hobby, followed by board games, followed by hiking, followed by reading a book. As my time constraints change, my priorities change because different things become more fun than others.
The reality is that a lot of my free time is in short blocks, except that I block off one weekend afternoon and evening for focused leisure time. What that means is that I simply don’t have nearly enough time for everything that I want to be doing.
The hobby I’m able to devote the most time to in a given week is reading, because reading is much easier to break up into smaller blocks. However, the hobbies I most desire spending time on are cooking, board gaming, and hiking. I simply don’t have time blocks for them.
What does that mean? In my head, my yearning for those hobbies that I don’t have as much time for as I would like grows and grows and sometimes influences how I spend money. I will convince myself sometimes to spend money on a hobby that I’m not finding the time for, and that purchase is almost always at a high dollar-per-hour rate.
Those purchases are almost always mistakes, too.
As much as it hurts, I have come to terms with the fact that I don’t have the time to invest in some of my hobbies that I would like. The other commitments and responsibilities in my life do not leave long afternoons or evenings to play board games or make gourmet food items. What that means is that I consciously make the decision to spend less on those hobbies and instead relish the equipment that I have when I do find time to explore them.
Rule #2 – You don’t always have the time to do everything that you want. Come to terms with that and accept that some time-intensive hobbies may have to take a backseat in your life for now, and thus you shouldn’t keep throwing money at them.
The internet is loaded with time wasters. Games, both in the browser and on smartphones, can suck down your time. Message boards can be a black hole of time.
The catch, of course, is that time that you devote to time wasters
Here’s a question I’ve started to ask myself when I realize that I’m playing a time-wasting game or I’m going down a rabbit hole on a message board or in internet searches: am I really getting any value out of this time? Would I rather be doing this than, say, reading a book or engaging in another hobby I love?
If the answer is “no,” then I find something else to do. Anything productive. Is there a work task I should be doing? I kill distractions and work on it. Is there a personal task I should be doing? I take care of that if it’s possible in my current situation.
Why? My time has real value, and the reality is that when I waste my time on something unimportant, it’s really just sucking away time from the hobbies that really matter to me. If I spend an hour reading internet comments on a political article, that’s an hour I’ve lost that could have been spent doing something productive, so that I could then tack an hour onto the time I spend on Sunday afternoon engaging in a hobby that takes more time.
In other words, the more time I waste on time-wasting activities, the less time I have to spend on meaningful entertainment and hobbies and the more split up that time is going to be.
I use that as a pretty powerful motivational tool. One strategy I often use is to come up with a pretty aggressive to-do list for the day. I mark the stuff I have to get done as high priority, then I have a lot of lower priority items. I make a deal with myself – if I can knock out all of those lower priority items, then I add time to my leisure block on Sundays. Usually, if I’m really productive during the week, I feel just fine spending time on the weekends making a batch of home-brew beer or going on a hike or playing a long board game. If I’m not productive, my hobby time on the weekend is eaten up by life tasks that I have to manage, so I end up only being able to enjoy activities with low time commitments.
So, what does that have to do with spending money effectively on hobbies? If I’m more efficient with my time during the week, I have more time in my life for some of the more time-intensive hobbies, which means that the cost per hour of enjoyment of purchases of those hobbies goes down. In other words, if I work on being more productive, I get to have more time for the leisure activities that mean the most to me and it makes more sense to spend money on items for them.
It all comes back to time wasters. The more effective I am at cutting those things out of my life, the more of my time I can spend on things that I value more. In this case, I’m replacing meaningless entertainment with quality leisure time spent on hobbies and entertainment that really mean something to me. My time has real value, and when I waste that time, it’s really not much different than throwing cash out the window.
Rule #3 – The value of your time is real, too, and some things are a better use of your time. Figure out which things aren’t very useful and cut them out of your life. This makes every dollar you spend on your hobbies more effective because you’ll get more time and use out of those items.
Let’s say, hypothetically, I have no unread books at home, but I’m interested in reading one. If I go to the bookstore and buy one, I’m going to start reading it immediately.
Let’s say, on the other hand, that I have 20 unread books at home and I’m in the middle of one. If I go to the bookstore and buy one, I’m going to add it to my pile of unread books, which now total 21, and when my current book is finished, I’ll choose one of those 21 to read.
One of those two stories depicts a smart use of hobby money, while the other does not.
What’s the difference? Diminishing returns. The more items I already have at home that I either haven’t used yet or would strongly consider using again in the near future, the less value I get out of a new purchase.
Think about it. If you have a bunch of unwatched series and movies on Netflix, you’re getting much less value out of buying a Bluray or a DVD than you would if you had a completely empty queue on Netflix. You’re just adding hours 101 and 102 to your already existing backlog of 100 hours of viewing. If you have several unplayed or underplayed board games in your closet, you’re getting much less value out of buying a board game than if you don’t have any unplayed games. The same is true of video games.
“But what if this new item is something I’m really excited about?” That may be true – you might be more excited about that item on the shelf than you are about something at home. But, if that’s the case, ask yourself this: wasn’t there a time when you were similarly excited about that item at home? It faded, didn’t it? Why won’t your excitement about this item fade as well? The truth is that excitement born in the heat of the moment almost always fades. When you feel more excited about something you spy on the store shelf compared to unused stuff at home, keep that in mind and wait a little while before making that purchase. Take a long, hard look at the unenjoyed stuff you already have at home, and then ask yourself whether the new purchase makes sense.
Rule #4 – Don’t spend hobby and entertainment money when you already have a bunch of unused or barely used stuff at home.
Rule #5 – The return you get for adding another item to a collection gets smaller as the collection gets larger.
The free factor
There’s one additional factor that’s been on my mind lately: the free factor. Simply put, some hobbies and entertainment options are free, so how can you really compare them to other options that cost money?
For starters, I usually compare free options to the options I already have in my home. The fact is that items I already own are items that are essentially “free” from here on forward, so they’re equivalent to free options. If I grab a board game off of my shelf, it’s essentially free to play it – the cost of it has already been paid and I’m not making any kind of spending decision. Thus, from the “free” perspective, going to a free community concert and playing a game I already own have the same cost.
The real decision about spending money on a hobby comes down to whether or not to enjoy free things or things that you’ve already bought versus buying more things to enjoy or going to paid experiences.
The frugal side of me wants to put a “premium” on the side of the free options, and I should – if I can have a good time with what’s free or what I already have on hand, then I should do that.
There’s a big factor I’m not considering here, though: the value of my time. Every time I spend an hour doing something, that experience has a value that, in theory, I can translate into dollars per hour. Reading a book in a quiet comfortable chair might be worth, say, $5 for an hour. However, playing a board game with a good friend might be worth $10 for that experience.
Not all experiences are the same, either. For example, if I’m curled up with a free book that I’m moderately interested in reading, it might be worth $3 for that hour, but if I’m really into the book, that hour might be worth $10 to me in terms of the joy I get in my life.
When you pay for entertainment or hobby items, what you’re actually doing is chipping away at the value of the time you spend. If it takes me ten hours to read a $10 book, then it needs to be at least a little better than my free options, but not enormously so.
So, here’s the point: free activities and entertainment have some real value, but they don’t trump everything; the key is knowing how much everything is worth to you. Of course, you can’t actually sit down and figure out how much an hour spent reading a book off your shelf is worth to you compared to reading the current bestseller you most want to read, but you can think about it and get a rough internal sense. I’ve found that if I spend some of my spare thoughts considering things like this, I end up making far better decisions about when to do something that’s free (or that I’ve already paid for) versus doing something that costs money.
Rule #6 – Free things are nice, but they don’t trump everything else; you can’t account for the “cost per hour” with them because of the value of your time.
A final factor worth mentioning is the patience factor. Suppose a new book comes out by your favorite author and you’re really, really excited to read it. You’re on the wait list at the library and you’ll get to read it for free in three months, but you could just spend $18 right now and start reading it immediately.
Comparing those two options, it could be easy to build a case for buying that book right away, but here’s the thing: those aren’t the only two options in the world.
You could spend the next three months reading other books from the library or other books on your shelves, for example. If this is the newest book in a series, you could catch up by rereading the previous books.
If you look at it that way, you’re not spending $18 to move from not reading anything to reading this new bestseller; instead, you’re paying $18 to move from reading the best book currently in your collection or at the library to reading this bestseller now versus three months in the future.
That’s not nearly as good of an entertainment bargain – in fact, it’s a pretty poor one.
What it reveals is that patience is a huge virtue when it comes to entertainment spending and sometimes with hobby spending, too. Waiting just a little while and enjoying things you already have access to in the interim often reveals giant bargains – you can borrow it for free or buy it for just a buck or two. Not only that, desires often fade out over time, meaning that you eventually won’t want the item nearly as much as you do right now.
So, when should you buy? My core principle is to write down that desired item and then wait a month, and in the interim, I enjoy things I already have. If I still want it after that month, I start shopping around for it. The vast majority of the time, the desire for that item has faded.
Rule #7 – If there’s even the slightest doubt, it’s almost always better to wait with a hobby or entertainment expense.
Throughout this article, I’ve pointed out seven rules that I use when spending money on hobbies and entertainment. Let’s look at them again.
- Rule #1: Don’t buy stuff that you’re not absolutely sure you’re going to use.
- Rule #2: You don’t always have the time to do everything that you want. Come to terms with that and accept that some time-intensive hobbies may have to take a backseat in your life for now, and thus you shouldn’t keep throwing money at them.
- Rule #3: The value of your time is real, too, and some things are a better use of your time. Figure out which things aren’t very useful and cut them out of your life. This makes every dollar you spend on your hobbies more effective because you’ll get more time and use out of those items.
- Rule #4: Don’t spend hobby and entertainment money when you already have a bunch of unused or barely used stuff at home.
- Rule #5: The return you get for adding another item to a collection gets smaller as the collection gets larger.
- Rule #6: Free things are nice, but they don’t trump everything else; you can’t account for the “cost per hour” with them because of the value of your time.
- Rule #7: If there’s even the slightest doubt, it’s almost always better to wait with a hobby or entertainment expense.
Taken together, those rules are pretty effective ones at guiding you away from bad entertainment and hobby spending choices, and most of the time, that’s all you need. The simple ability to say “no” when faced with a tempting hobby spending choice that really isn’t a smart decision is one that will usually be all that you need.
How do you find the best choices, though? That’s a much more difficult question to answer because everyone has different passions and interests. Even people within the same hobby will have very different answers.
My suggestion? Let these rules guide you away from the poor choices, and let your own heart guide you to the best choices. Together, they’ll help point you to effective hobby and entertainment spending.