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When given the choice between spending on hobbies or paying down debt, our decision should be easy to make. But unlike death and taxes which are certain in life, we still have a choice when it comes to how we spend our money. Unfortunately, many people will choose to spend on their hobbies, but guess what? That might be okay.

Listen, I get it. I enjoy spending as much as anyone else does. Travel is an absolute passion of mine and since I see it as an experience, I don’t mind spending extra on it. The same applies to food; I love eating out. But, I admit that eating out too much can cost a small fortune. For me, it comes down to finding the right balance between spending and saving.

hobbies or debt

Budgeting for experiences

We all need something to keep us sane. Nothing excites me more than getting on a plane and knowing that once I land, I’ll be exploring a new destination. For others. it might be something like sports or reading books. Hobbies keep us healthy since it’s a way for us to escape our daily routine. The problem is, hobbies can be expensive, but they can easily be managed.

I personally believe in paying yourself first. We all know that with our budgets, our fixed expenses come first, but I believe savings comes next. So in my case, my travel budget is high on my priorities list. Every month, my wife and I set aside $650 a month for travel which gives us a total of $7,800 a year. I know it sounds like a lot, but having experiences is something I don’t mind spending extra money on.

With this budget in place, I don’t care how often we travel, as long as we don’t spend more than $7,800 a year. That could be one epic trip or multiple smaller ones – it makes no difference to me. By saving money for my “hobby” first, I never need to worry about credit card bills later; I already have the money. The same thing can be applied to whatever your hobby is. Set aside some money for your thing and don’t stress about it.

Look at your debt

Even though I do believe in a balance between saving and spending, there is a time when I think you should focus strictly on saving, or rather, debt repayment. If you have any outstanding consumer debt such as credit card debt, that absolutely needs to be a priority. It makes no sense to be spending money on your hobbies when you’re paying 19.99% interest on your credit cards. The benefits from your hobbies aren’t worth those interest charges.

Other forms of debt can be a bit more manageable. Student loans and mortgages have reasonable interest rates so you could argue that it’s easy to find a balance between your hobbies and debt repayment. I’m not entirely opposed to this idea, just be aware of how much extra you’re paying in interest charges.

The same thing applies to mortgages. Interest rates are so low that I don’t think there’s any real reason to rush and pay yours down (unless you hate debt). You could easily invest that money instead. As long as you haven’t over extended yourself to begin with, it shouldn’t be too hard to find your balance.

Sometimes you just need to make sacrifices

I find it amazing that some people who know they’re not in the best situation aren’t willing to make sacrifices to their hobbies. If I didn’t make it clear above, if you have outstanding consumer debt, you need to make cuts. But this doesn’t mean you need to cut out your hobbies completely.

In my case, I could reduce my travel budget. Those who like sports could try to look for cheap leagues to join, and those who love to read could get their books from the library instead of buying them new.

Final thoughts

There might come a time when you do need to make real tough decisions about your finances. High-interest debt will always be your #1 financial priority; it’s silly to think otherwise.


  1. Ashley on November 1, 2016 at 1:00 PM

    Sometimes I disagree with the comment on not paying down your mortgage because you can invest since mortgage rates are so low. Investing is betting on the future. For me, paying down my mortgage quickly at these low rates ensures I’m not caught in a sudden rate rising period of time. For me, I’m thinking rates may rise and thus, on my variable rate mortgage, I want to ensure I don’t get caught with higher payments.

    It’s a bet, and I’m playing both sides. Going variable to get a lower rate (in theory). Paying it off quickly to ensure that higher rates in the future don’t harm me. The comfort of having that mortgage amount continue to go down helps me sleep well, and there’s other money for investing. Just perhaps not quite so much.

    Nice article!

    • Barry Choi on November 1, 2016 at 3:02 PM

      Hey Ashley,

      I won’t argue with you on that one. Paying down your mortgage is never a bad idea. I personally have payments set to advanced bi-weekly and I make an extra 15% payment since I’m allowed to. However, I don’t make any lump sum prepatment since I prefer to invest.

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