This guest post was written by Go Banking Rates, bringing you informative personal finance content and helpful tools, as well as the best interest rates on financial services nationwide. Follow them on Twitter at @GoBankingRates.
Living for the moment is a rule that some people love to live by. However, since the onset of the recession, many people became serial penny pinchers, determined to hold money in their bank accounts until the banks crumble with their money inside (well at least it’s insured, right?).
Despite the choice many have made to tighten their financial reins, some people are still working overtime for their guilty financial pleasures, refusing to let high expenses stop them from nurturing their favorite hobby or interest. But is this an acceptable thing to do? How can we know whether we should always penny pinch or whether it’s okay to go ahead and dive headfirst into our guilty pleasures?
Determine Whether Your Guilty Pleasure is Worth the Money
Obviously there are tons of benefits to saving money, just as many as there are downfalls to spending too much on something that doesn’t necessarily benefit you. So if you’re spending an arm and a leg on your guilty pleasure, it’s good to at some point ask yourself if it’s actually worth the money you’re paying.
For instance, if you love to purchase stamp collections because you love the way they look, you may have to ask yourself if spending $1,000 here and $5,000 there is worth it, especially if you are left trying to figure out how to pay your mortgage.
The same goes for the love you may have for fixing up cars or purchasing the latest cell phone every time one is released. Just because you see it and want it doesn’t necessarily mean you should spend your hard-earned money on it. So before you throw money away, it’s good to make sure what you buy is actually worth the money.
Turn Your Guilty Pleasure into Profit
What’s one way to determine whether your guilty pleasure is worth it? It helps to see if your hobby can offer you a profit. For instance, we all know that stamp collections can be very valuable. But if you are spending hundreds of dollars on stamps that aren’t worth much then your pleasure is not worth the money.
To make your hobby financially worth it, you could conduct plenty of research on the stamps you choose to gain knowledge of what’s valuable. That way, you would know that your stamps are actually making you a profit.
Same goes for fixing up your cars or even purchasing the latest cell phones. You could fix up your cars then enter them into car shows with cash rewards. And as you buy cell phones, you could blog about all of their elaborate upgrades and rake in money through advertisements for offering your expertise.
After you’ve collected your money, you could open one or more high interest savings accounts or looking into some investment strategies that could help you grow your money even further.
Create a Budget that Loves Your Guilty Pleasure
If you are engaging in a guilty pleasure that you can’t seem to turn into a profit. then it’s good to consider making sure that your budget accommodates your hobby. Many people find that they have drained their checking account because they spend haphazardly on what they love.
However, if you place your hobby into your budget, you could find ways to make spending work without breaking the bank. Adding your guilty pleasure to your budget could help you:
- Organize: By taking a closer look at your budget, you have the opportunity to look at how much you’re bringing in and need to spend on bills. This could help you determine just how much leeway you have to spend on your hobby.
- Make adjustments: Working on a budget helps us take a closer look at items we spend money on unnecessarily. For instance, you may have five subscriptions to magazines that you don’t read. By cutting those loose, you might be able to create space for your guilty pleasure.
- Become financially responsible: The key to good money management is learning to restrict your wild spending. By adding your hobby to your budget and allowing yourself only a certain amount to spend on it each month, you learn the value of money and what it means to be financially responsible.
There’s nothing wrong with having a guilty pleasure. For many of us, it makes us feel that we’re actually living our lives to the fullest. However, if your pleasure is causing you financial pain, it’s good to take a look at how it could be budgeted into your finances — or even turned into a profit — so that you don’t go broke having fun.