Cardboard Finance - Do You Set or Keep a Hobby Budget?

*Because every post is better with a card included, and I wanted an excuse to show this one again

Collecting should be about fun, first and foremost.  While I agree with that whole-heartedly, the reality is that there are many underlying factors to enjoying this hobby of ours.  Whether we like it or not, one of the most prevalent and critical is money.  Except for rare cases, like this wonderful blogging community of ours, most of us aren't running around scooping up the cards we're looking for at absolutely no cost.  For better or worse, money is at the root of much of what we do as collectors.

While I make every effort not to let money dictate my life, I am admittedly a nerd (should not be a surprise given that I write a baseball card blog) and I find finance a somewhat interesting topic generally speaking.  I've got some ideas that I plan to turn into a short series of posts here on the blog exploring the link between funding and our wonderful hobby, under the title Cardboard Finance.

For the first post in the series, we'll discuss one of the most obvious intersections between these two topics...card collecting (or, insert hobby name here) budgets!

I'm confident that, like nearly everything else in our hobby, there will be a wide range of opinions and approaches to this topic.  For every collector out there who has no sense of a budget whatsoever and simply buys whatever they fancy, I'm willing to bet there's another one on the opposite end of the spectrum that strictly limits their spending and tracks every penny.

For me personally, I've gone through two different phases/approaches with respect to budgeting since I returned to collecting about a dozen years ago now.  Let's take a quick look at each...

Approach #1 - Hard Limit on Hobby Spending Each Paycheck

From the point when I re-entered the hobby in 2007, through the end of last year, this was my method of hobby budgeting.  I'd determine a maximum amount of money that I was comfortable and willing to spend on cards each paycheck, and keep a tally of my purchases in order to cut myself off if and when I reached that maximum.

To me, a budget has to be very simple to keep up with or I'll quickly abandon it, so I decided to track this in a basic notepad file on my computer.  The snippet above gives you the general idea, and you can see how I did with my mid-April 2017 paycheck.

Make a purchase, note the dollar amount rounded to an even dollar for simplicity, with a brief description of the item.  At the bottom tally them all up, tally up any shipping costs (since much of what I buy is online), then add those two together and you've got my total spend for the pay period.

I've got two sections like this per month, twelve months a year, going back well over a decade in my file now.  This method worked fairly well for me for a long time.  Some paychecks I'd admittedly go a little over budget, others I'd come in under, but what was important was that I was aware of what I was spending.  Also, it's kind of neat to be able to scroll back through the file and recall some of my purchases from long ago, or see how my hobby spending is trending over time.

What I didn't like about the approach as time wore on was the rigidity of it.  I'd typically try to limit myself to between $50 and $75 a check, or $100 to $150 a month, on cards and related expenses.  If I wanted to make a big purchase, or went a little wild one month, I'd feel a little guilty.  On the other side of the coin, if I stayed well under budget it felt great, but also felt like I missed out on some more potential fun acquisitions.

After a long time operating under this model, I made a change at the beginning of 2019 that I've been pleased with so far...

Approach #2 - Invest or Save $1 for Every $1 Spent on Cards

The title pretty much says it all, but let me elaborate a little.  Instead of keeping a strict monthly or twice-monthly spending limit, I loosened things up a bit.  First and foremost, I moved to tracking expenses by the month instead of by the paycheck, cutting my "boring book-keeping/reconciliation process" down from 24 times a year to 12.

Secondly, I decided on an approach that would greatly simplify things, give me much more flexibility at the same time, but still keep me honest and feeling good about the amount of money that I'm spending on my hobby.

The rules are simple, I can in theory spend as much as I want on sports cards.  However, every dollar that I spend on the hobby requires that I save an equal amount.  That can come in the form of putting it in a savings account, or investing in the stock market; either is fine so long as I'm saving.  To clarify, this is out of my take home pay.  Money that comes out of my paycheck pre-tax for my work 401k retirement fund doesn't factor in here at all.

Here's a snippet of a month under the new model, last month in fact.  Only takes me a minute to note the date, description and amount whenever I make a purchase.  End of the month I tally it up, and ensure that I saved or invested an equal amount during that same stretch (in the case of June I deposited the $65 into my Stash app, and bought fractional shares of both Paypal and Amazon!).

I informally keep an eye on it throughout the month to make sure I'm generally on track, but if I end up slightly behind when the month ends I simply don't allow myself to purchase any cards the next month until I've "paid the previous month off" by investing or saving what I needed to break even.

I'm loving this approach so far I have to say.  It's actually motivated me to, in most cases, spend less money per month than I was under my former model.  As a side effect, I'm learning a ton about investing, and it feels great to watch my savings build up at the same time that my collection does.  I'm intrigued by the "unlimited potential" of this model and the flexibility to pick up some really big cards if I can stay patient.  So much so that it has motivated me to start selling off some parts of my collection that I'm not as keen on anymore in order to raise more money for new cards and for investing (the subject of a future Cardboard Finance post).

I also dropped the tracking of shipping costs in this new model.  They were kind of a pain to keep track of, and at the end of the day the hobby is supposed to be enjoyable.  If something's bothering you about your budget, or any other aspect of your collecting for that matter, just don't do it!  I feel that I'm being responsible enough with my purchases in this scenario that if I don't account for a few bucks in shipping each month, so be it.

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So, there's my two cents on budgeting in our hobby, and a little overview of the two approaches I've used over time.  How about you?  Do you have a collecting budget, or would having one sap some of the innocence and enjoyment out of the hobby for you?  If you do have a budget, how does yours operate compared to the approaches I've used and outlined above?

If someone asked you how much money you spend on sports cards, how would you answer the question?  I'd love to hear your opinion in the comments below, or even better if you have your own blog I'd love to read an entire post on the topic!