Most of us work a full-time job so that we can put food on the table for our family and us, but that doesn’t mean we can’t have some fun with your money. While there are fulfilling hobbies and activities that we can do that don’t involve spending money, most of us will still need to have an unforgettable experience. Whether it’s buying designer clothes, going on an international flight, or booking a well-earned vacation, spending money is needed to have a good time. But even though we have to spend our own leisure, this doesn’t mean that we have to spend a good chunk of our funds on such occasions.
Normally, we compartmentalise different aspects of our lives. A good part of that is dividing parts of our budget for necessities (food, insurance, bills, rent) and wants (apparel, entertainment, hobbies.) Although saving up for the future might seem like a tall order, especially when you want to live at the moment, it is still possible. Here are some things that you can do when managing both your needs and your wants.
Needs Should Be Prioritised First
But right before you can start swiping down your debit and credit card to buy those sleek-looking sneakers or that golf set that you can use over the weekend, there are still a few things that you’ll need to know to ensure that you’re in a good spot in terms of finances. Your necessities and needs should be the priority over your wants; otherwise, you’re setting yourself up for financial problems in the future.
Wipe Off Any Debt
First and foremost, you want to ensure that you’re out of any financial hot water that you might be in. Simultaneously, taking loans and is alright, especially when setting up your business or investment. Accumulating debt can be detrimental to your socio-economic status. When you have accumulated wealth, debt will be your downfall. You must get rid of it as soon as possible. You might have to put off that car loan if it’s not a necessity right now.
Impose a Strict Budget
In relation to the previous section, there will be times that we can’t just pay off the debt in a month or the same year, and it’s going to take a toll on the money that we have on-hand. You don’t really have to spend an exorbitant amount of funds on your hobby as you can still have a good time on a budget. Remember: it’s alright to have fun, but if you’re going to place all of your funds that could have been used for retirement on what you want right now, you’re going to have a hard time in the future.
Establish Emergency Funds
There will be times in our lives where we will meet adversities and emergencies, especially in natural calamities and disasters. If you don’t have any monthly expenditures other than your necessities, such as debt, it’s important to have funds that will be food for at least three to six months’ worth of monthly expenses. Experts would suggest having at least $2,800 for each month since that is the average monthly expense of most individuals living in Australia.
However, some would argue that $1000 is already a good amount, especially since $2,800 already covers many other aspects, such as wants. Still, Murphy’s law says that anything that can go wrong will go wrong, so it’s only appropriate that you prepare for the worst.
Invest Your Funds
Other than just letting your money collect dust in your wallet or bank account, you can start investing your funds on businesses and platforms. Even if it’s just setting aside 15% of your monthly income on investments, you can have even more money than you can spend on your hobbies or as capital for your very own business.
If you’re in doubt about your budgeting abilities and compartmentalising your finances, you can always consult experts and professionals regarding investments, expenditures, and your budget. Fortunately, financial coach services can give you a comprehensive and definite answer on what you can do regarding your financial situation.
Enjoying Hobbies on a Budget
Now that you’ve secured your needs, you can start having some fun by pursuing your interests and hobbies! Again, you don’t really have to spend thousands of dollars to have a good time when there are hobbies that can be done on a budget. Contrary to what most people think, being “on a budget” doesn’t necessarily equate to a downgrade of your experience’s quality. Here’s what you can do:
Try It Out First
Most of the time, people will commit to a hobby just because most of the sportswear or equipment they find is flashy and seems to work well. Although you might be interested in that hobby this week or the next, there’s no guarantee that you won’t lose interest in the next few weeks. Instead of outright committing to a certain hobby, you can test the waters out first. Try borrowing a friend’s equipment and test it out first.
Saving Up for Your Passion
Remember when you really wanted that nice pair of shoes, but you couldn’t afford it, but you eventually got when you started saving up for it? Well, that concept still holds true even when you’re older. You can start saving up a bit of your monthly salary for that one “goal” that you’ve always wanted.
Secondhand Items Are Magical
When it comes to high-quality leisurewear, sportswear, and gadgets, they’re bound to cost a fortune unless you’re into low-quality equipment. But you don’t have to choose between low-quality inexpensive equipment and high-quality, expensive equipment when there is a variety of good second-hand equipment that you can buy from others. There are even different equipment types that haven’t been used and are just waiting for you to try them on.
There are a variety of ways of having fun without having to sacrifice your budget for your necessities. Although you might want to save up, your happiness and the memories you’ll have with others are still important.