Frugality Versus New Interests

A reader recently wrote to me about her struggles with when to be frugal and when not to be:

I’m a long-term reader and appreciate your work. Just came across this blog entry and thought to pass it along if you haven’t already seen it ( It made me pause to think about some of my recent struggles with purchasing decisions.

I’m frugal by nurture (raised by immigrant parents) and often would opt for used, on sale or cheaper versions of things, but last year I purchased a robot vacuum for $300. Almost immediately I felt some buyer’s remorse, but over the past 6 months, having it has really improved our lives, esp. for my husband. Both my husband and I work full time, we have two kids, and my husband is a neat freak so he was spending a lot of his time cleaning, which left him with less energy and time to do other things or to rest. The experience showed me that sometimes it’s good to pay for quality products.

Recently, I’ve been feeling guilty about spending money on my new hobby of rock climbing. It started with enrolling my child in a rock climbing class, which I think is worth spending on, as an enrichment activity. But I started to climb while she is in class and fell in love with the sport. I would like to get to the next level but felt like I’ve hit a plateau of what I can achieve on my own so I looked into lessons, which can be $30–$50 for 1-2.5 hours of instruction. A pair of shoes can be well over $100! After reading the above blog post, though, esp. the journal idea of documenting what makes one happy and reflecting on these, I’m starting to realize that spending money on experiences and learning new skills may be worthwhile.

So this isn’t so much a question for you as it is an idea for you to write about – some guidelines / wisdom for when to make “exceptions” to the general rule of being frugal.

I agree in a lot of ways with what the author was saying with regards to the “ten rule” in that post. For those who didn’t click though, here’s the “ten rule”:

Anything you buy today, your future self is paying 10x as much for. So add a zero onto the price tag, and ask yourself if it’s still worth it. If it is, buy it and enjoy it. If not, then forget it!

So, if you’re thinking of buying a $1 treat, imagine that it costs $10. If you’re thinking of buying a $200 treat, imagine it costs $2,000.

There’s actually some economic justification for it if you consider that it’s taking money away from things like long-term savings and investment in retirement. An investment with a 7% return takes just a bit over ten years to double and actually hits the 10x plateau in 35 years, which is a pretty realistic way for younger folks to look at retirement. Every dollar spent today becomes $10 lost to retirement for people under, say, 35.

The real problem with deciding whether a purchase makes frugal sense is that, in some sense, you have to predict the future. This is particularly true for hobby-oriented things like the rock climbing you mention. Am I really going to get lasting value out of that purchase?

The big problem is that it can make you extremely tentative to try new things. If you apply a strong rule like the “ten rule” to your hobby spending and you’re trying to estimate the value of trying something you’ve never tried before, you have to take into account that it might not really work out for you as a hobby.

Let’s say, for example, that I’d like to try to learn the banjo. I find one on Craigslist for $10 and I also find a “teach yourself the banjo” kit for $10. I don’t know if it’s something I’ll stick with long-term, but it’s something I’m willing to try out.

However, if I use the “ten rule,” I’m envisioning a “future cost” of $200 associated with dabbling in a new hobby. That’s really daunting, and it’s enough to turn me away from this potential new interest.

My solution is that I set aside a certain amount each month for hobby and personal interest purchases. These are things like board games or music lessons that I get personal enrichment from but are extremely hard to estimate a real-world value for.

Within that portion of my money, I don’t sweat that type of return on my money. I recognize that sometimes, when I explore a new interest, it might not pan out like I hope.

So, to take on the reader’s problem, let’s say she has a certain amount she can spend on hobbies each month. Let’s call it $100.

Now, if she wants shoes for her burgeoning rock climbing hobby, it might take all of her hobby money for that month, but she can pick them up guilt-free. If she wants lessons, it would eat up the money from a future month.

If she decides to walk away from rock climbing, that’s fine, too. It’s hobby money, which means that there’s no guilt involved when your interests change, which they will do over time.

As a bit of an aside, I prefer to spend hobby money on experiences rather than items. I’d rather go to a gaming convention than own a board game, and I’d rather take a music lesson than own a nicer instrument. Experiences don’t fill up your closet when you change your mind.

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