overhead of classic car

Hobbies: Worth Going into Debt For?

Having hobbies that you enjoy can add significant pleasure to your life. From skydiving to knitting, or archaeology to photography, hobbies can provide endless possibilities for fun and engagement. Some of them can be fairly inexpensive (and there are even hobbies that cost nothing, or nearly so), while others can cost some pretty big bucks.

To add to the picture, what’s affordable for one person may be pricey for someone else. If your hobbies fall into the big-bucks category, based on your financial circumstances, you may find that you’re spending more than what you can finance from your income alone—and, in that case, you may be going into debt to continue to enjoy the hobbies you love.

So, is it worth it? Are hobbies worth going into debt for? Only you can answer that question, but we’ll provide observations and insights for you to consider in this post, including ways to budget hobbies effectively if you’d like to better manage expenses. And, if you’ve found that you’re already in more debt than you’d like from the pursuit of hobbies, and you’d like to get out of that debt, we’ll offer up some practical tips.

Low Cost Hobbies

If you’re looking for hobbies that are literally free, then this can be challenging. For example, you can check out all sorts of books, movies, games and so forth from your local public library, but you’re likely paying some taxes towards the funding of the library.

And, depending upon where the library is located, you may need to use up some gas in your car or ride a bicycle that will ultimately need some maintenance. But, enjoying library resources is an extremely low-cost hobby to pursue.

Other hobbies that can be enjoyed at a low cost include:

•  drawing pictures

•  walking in local parks

•  learning a second language

•  birdwatching

•  running

•  joining a bridge club

•  fishing

•  gardening

•  genealogy

•  listening to music

•  playing chess

•  embroidery

•  volunteering

•  visiting museums

•  house sitting for people around the country

•  super-couponing

•  assembling jigsaw puzzles

•  thrift shopping

•  learning magic tricks

•  yoga

•  meditation

•  geocaching

Some of these hobbies can actually generate income and perhaps be profitable, such as if you house sit or charge people to walk their dogs as part of your park explorations.

Expensive Hobbies

On the other side of the spectrum are some of the more expensive hobbies, such as traveling to find classic cars in someone’s old garage, buying them and restoring them to their former glory.

This can get pricey, as you’d need to buy the car itself, along with fitting out your garage with the necessary restoration equipment, scouring the web and world to find original parts and so forth. You may also need to pay other people to help you do specialty jobs.

The cost of this hobby is hard to predict because there are so many factors, but it could end up being close to $25,000 depending on the costs involved in a particular project, And that’s just one car.

Now, if you turn around and sell your restored car before starting over with the next project, that’s a different story, crossing over from a hobby into a type of business. Kept in the realm of a hobby, car restorations can get quite costly, with one Canadian site warning readers that restorations have even reached the astronomic cost of almost $600,000 USD! Seriously.

As another example, let’s say you love to visit art museums, and you decide to begin to invest in art for your own home. According to Happening.Media , global sales of art as an investment have quadrupled in the two decades leading up to 2018, with 86% of 2017 art purchases completed with an investment mindset.

If this is your hobby and you’ve become highly experienced in art investments, then you probably already know that this type of investment is now in the “mature stage,” which means that not all artwork that would have previously gone up in value will do so today.

As art investment has become “more sophisticated you need to really know where to put your money” according to Rayah Levy, CEO of art investment company ArteQuesta . Sure, you might get lucky and find a $500,000 Joseph Kleitsch for $100 , but don’t count on it.

Another example of a potentially expensive hobby is coin collecting , with the 1913 Liberty Head V Nickel valued at a cool $4.4 million in 2018; the 1870 S Liberty Seated Dollar going for almost $2 million; and the 1927 D St. Gaudens Double Eagle setting collectors back by $1.2 million, as three examples. Obviously not all coin collectors go after such big bank, but the reality is that, when you collect coins, you’re buying rare forms of money.

Oh, and figure on paying around $45,000 to climb Mount Everest . Or, if climbing a tree to reach a treehouse is more your style, budget at least $1,000 for a 12-foot octagonal kit .

Hoping for that Big Find

Some people who collect certain objects as a hobby do so in the hopes of scoring a killer find that will be worth its weight in gold. And, occasionally, that happens—such as when a long-time collector of rhinoceros horn carvings bought a collection for about $5,000, then had it appraised for $1-1.5 million.

Those kinds of situations happen, clearly, but what makes them such an amazing story to hear is because they happen rarely. Such windfalls defy the law of averages and aren’t something a typical collector can count on.

So, returning to our original question, are hobbies worth going into debt for? And, if the answer is “no,” then there are tips to help you to budget hobbies.

How to Budget Hobbies

To determine how much you can personally spend on hobbies and still avoid going into debt, check out these budget-making steps:

•  Gather together all of your financial documents, including the most recent bank statements, credit card statements and so forth.

•  List your monthly expenses, both fixed and variable, including mortgage loan payments (or rent), car payments, student loan payments, credit card payments and more. If you’re a coin collector, for example, what do you pay for magazine subscriptions, club dues and so forth to pursue your hobby? What about clothing purchases, entertainment expenses and so forth?

•  List your monthly income from employment, interest, dividends and so forth. Include, say, speaking fees you receive when you give presentations on coin collecting.

•  Detail what you have in savings, including retirement funds.

•  Make sure to list what comes in and what goes out each month. What adjustments do you need to make to balance your personal budget, including what you want to spend on hobbies? Tweak, as needed.

•  Monitor your budget and adjust as life circumstances change. If you’ve been hired to lead weekend hikes, for example, will that extra money go towards your hiking hobby or used to pay down debt or boost savings?

Here’s another strategy to consider. If you’ve built up credit card debt in pursuit of your hobbies, gaining control over that debt can help to get your financial situation in better shape. And, if you’re finding it difficult to pay down your credit card debt, that’s not unusual. Here’s why.

Credit card companies usually charge compound interest, which means you get charged interest on the interest that you’ve already been charged. Interest on credit cards is often compounded daily and, until you pay off your credit card balance in full, this debt spiral just continues. If you’re late on a payment, you very well might get charged a late fee, with interest on that amount added to your balance, as well.

To help break this cycle, here are four methods to consider:

•  Debt snowball method: Here, you focus on paying off your smallest debt first and then pay off the next smallest of your remaining debts, and so forth.

•  Debt avalanche method: Pay off the debt with the highest interest rate first, then the next highest, and so forth.

•  Debt snowflake method: Use extra money collected to pay down debt. This can mean gathering change or charging people to learn about the hobby you enjoy, or something else entirely.

•  Debt consolidation method: Here, you would consolidate your credit cards into one debt, perhaps into a lower interest personal loan.

It is important to remember that you should continue to make all of your debt payments while using any of these debt repayment methods.

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If you’ve decided to apply for a lower interest personal loan to consolidate your credit card debt, there are multiple benefits when you choose SoFi. These include:

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The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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