Thursday, July 18, 2019

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.


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!


Jeremy said...

This is a great post. I think about budgeting for the hobby a lot because of my background in personal finance, and also because the hobby is such a money sink. I used to work for TD Ameritrade and I completed the Canadian Securities Course, Series 7, Series 63, and Certified Financial Planner foundational course. It's something I'm interested in, even though I don't work in the industry now.

I have been using the app You Need a Budget, which is basically the envelope method of budgeting turned digital. You assigned your money to specific categories, and that's what you have to spend. You create your own categories, and I made one for sports cards. Like you, sometimes I am over and sometimes I am under, but I am aware of what I am spending.

I like your idea of saving another dollar for each your spend on the hobby, but you need the extra cash to do that. What I have a hard time with is how expensive the hobby is. I'm in Canada, so it is especially difficult because the cost of shipping from the US to here keeps getting more expensive. I barely buy through Ebay now for that reason, and most of my spending is through COMC or Sportlots.

I feel a major part of making a sports card budget succeed is focus. If you stick to a tight budget, then I think you get more mileage if you focus that budget on accomplishing goals in the hobby. That could be completing a set, or spending a month focusing on a specific player collection.

On the other hand, you need to stay flexible and sometimes there is something on COMC or Ebay for a crazy good price that doesn't fit your focus, but makes no sense to pass up. And really, the biggest waste of money in the hobby is unopened product, and we all go through a phase of busting wax, feeling we got ripped off, not busting for awhile, and then doing it again and going back through the cycle.

My blog is at if you want to check it out.

Billy Kingsley said...

I have very little money to spend...most of it goes to the medicine that keeps me alive. What doesn't go to that goes to cards, or it did. In March I decided that I need to work on saving money to make my dream of classic car ownership come true. So, I cut my card budget to zero. I held it at zero from April to July, having just finally bought something for myself this last weekend. I go into my mindset more here:

It hasn't worked out as well as I had hoped for. The money is not going to cards but it's going other places instead...bills, food, doctors, etc. so in all that time I had saved up exactly $12. And I've since spent that. As I feared, I'm giving up one hobby to chase another and I'm going to end up with neither. My life savings is essentially whatever's in my wallet at any given time, although I do have some set aside for trips.

I have still gotten some new cards, thanks to my family members, but other than that, I'm doing without. And to be honest, I'm ok with that. I have such a large collection already that I still have plenty to work through. And I keep getting large boxes of castoffs in my po box so I will be set for years :) I am actually holding off on going through the majority of those boxes for now, to save them for later when I really want to get new cards but can't.

Back when I was spending money on cards, my monthly budget was variable. It averaged out to be about $20 a month but usually it was more like $60 in one month than nothing at all for three months. I would always save up more for black Friday and usually had about $200 to spend each year. This year, that money is going to my trip to Toledo. The model car convention held there is celebrating it's 40th anniversary, and it's the final one, so I have to go back. I went from 2003-08 but a combination of cost and health problems made me have to stop. I also have a very strict limit of $20 or less for a single card, with the exception of Elton Brand. I would go a little higher for him. But most of my single card purchases are $2 or less.

Fuji said...

I've tried the whole "card budget" thing, but it takes up too much of my time. I put all of my card purchases on my PayPal credit card and pay it off every month, so I have a rough estimate (gotta factor in other non-card purchases made) on how much I spend on cards. Every now and then, there's a month where I spend more than average (my average is about $75 to $100 per month). If that happens, I make a conscious effort to cut back.

CaptKirk42 said...

I like that $1 for a $1 savings plan thing. I often spend too much to make that system work efficiently.

I don't have a specific budget. Some months I spend tons on cards other months hardly anything if at all. Even though I have a LCS within 4 miles of me most of my purchases are online, though Ebay or Sportlots. Occasionally other card sources (Dave & Adams Card World, COMC). I keep telling myself I need to go to the card shop. It has been well over a year.

The Shlabotnik Report said...

I track the money I spend, and on my blog I talk about cards being out of my budget, but I don't really have a budget. For me, it's just a matter of what I'm comfortable spending on cards, and I'm generally not a big spender on most things. I'm also not hugely concerned about condition on vintage cards, which helps quite a bit.

I've had a post idea for a while that isn't about budgeting so much as it's about my financial approach to the hobby... I'll see if I can't get that finished and posted in the next week or two.

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