The Secret to Calculating How Much Money to Spend on Hobbies (Without Overdoing It), According to a Financial Advisor

Although it can be helpful to recreate and disconnect from your routine, these expenses become problematic when you put your personal finances at risk.

THE offers the seasonal shopping at department stores, the calls from your friends to go out to eat, the announcements of new shows that you consider unmissable and the preparations to choose what the outlook for your next vacation will be. .

There are several of them invoices which may arise to encourage your hobbies either entertainment . And while it can be helpful to disconnect from routine and everything that work means, it can become a problem when you put your finance staff.

Have you ever spent an amount on purchasing an item or hiring a service, only to regret it as soon as you carefully check your bank account?

There are a series of strategies to prevent these situations. in which you can even press the buy button without being so convinced or out of simple impulsiveness.

The financial advisor of Conversely Margarita Illescas, recently explained to Business Insider What Even if you have thought about taking care of your future expenses – like savings , investments And retirement —, you will not be able to manage your money effectively if you do not analyze your current expenses .

“You have to have a balance . We must design our future, in the medium and long term, but we must live in the present and this present is today. You shouldn’t feel guilty for wanting to have a leisure space . From now on, we must move from savings to leisure. “If you live today, but you cannot survive tomorrow, you upset the balance.” .

“For example, even if I have a budget, If the sale is coming and I want to go shopping, I sign up and go. But for that I have to plan “.

This seems logical and reasonable, but, in practice, How to calculate how much to spend on entertainment without overdoing it?

They were Illescas’ recommendations .

The secret to calculating how much money to spend on hobbies (without overdoing it), according to a financial advisor. Photo: reference.

How to Calculate How Much Money to Spend on Hobbies (Without Overdoing It)

Whatever one’s tastes (and what they decide to spend on their entertainment), The first thing to keep in mind is that these types of expenses are variable. .

This term refers to two main factors: that they are difficult to control — because they can be more or less so depending on the month — and that they are replaceable, so they could be cut in an emergency and continue to live without having done them.

Here are those mentioned in the first paragraph of this note, like your budget for eating out with friends, going to shows, or going on vacation Just to name a few.

On another side, This category does not include your rent, food, mortgage, or other types of fixed expenses that are out-of-pocket periodically and that you cannot stop paying. said the expert.

So with these clear concepts, suggests that you start your financial planning by defining the amount of your fixed expenses, your savings capacity and your variable expenses .

If you’re setting a budget and you don’t know how to define hobbies – because you’ve never done it before – what will surely happen to you is that in your budget, hobbies take up a large portion of your income . . It will also depend on your lifestyle.

“You must always calculate it the same way: when you have the income. The first, You will leave fixed expenses in your budget, you will devote part of your money to savings – whether in the short, medium or long term – and, what you have left, you will be able to distribute it in your article Recreation. “.

Under this line he said that “from there you adjust” .

Ultimately, it involves allocating part of the annual budget to expenses of this type. . Food, clothes, birthday or Christmas gifts…,” said the specialist.

With this, you will not only be able to keep your finances in order, but You will also be able to better assess which entertainment expenses actually generate the greatest satisfaction. .

SO, You’ll avoid finding yourself in a scenario again where you swipe the card or press the buy button, only to regret it later or feel like that item or service wasn’t what you really wanted . .

Source: Latercera


Leave a Reply

Your email address will not be published. Required fields are marked *