Dealing with Hobby Purchases... Without an Emergency Fund

May 12th, 2014 by 
PK

In a Weekender, I shared with you a horrible tail of woe: for the second time in two years, I had an issue with a guitar purchase.  Last year, I bought a Les Paul Special... knowing it wasn't a carved top, sure, but expecting the 'Les Paul' signature silk-screened on the headstock like it was in the marketing materials.  This year, it was an Ebony Les Paul Studio purchased on eBay which was cancelled without warning (on an even better deal). My hobby purchases weren't succeeding!

As you guitarists know, there is a term, 'GAS', which refers to the drive you get to purchase guitars, especially if you've failed a same time.  So-called guitar acquisition syndrome is hard to stop - and I knew that I'd have to keep looking for another one.  But how did I do it without tapping my emergency fund, something we've argued is superfluous?

Unnecessary Hobby Purchases

Picture of a Les Paul Studio in Faded Heritage Cherry. 2008 model.

The "Old" Les Paul Studio

I'm happy to report that my guitar count increased by one!

I bought a Caribbean Blue Les Paul Signature from zZounds, curing my GAS with one click.  I then swapped white plastics into the pickup rings, 'poker chip' and pickguard, and put white speedknobs on the volume and tone dials.  Of course, I also got a pair of strap-locks to assuage my guitar-drop-paranoia (and a personalized leather strap from Etsy).

I'm also happy to report that I did all that without "tapping my emergency fund".  I also did it without causing unnecessary martial strife (hey, my wife also loves the look of it), which is worth way more than money.

How so?  Here's the boring part: typical "pay yourself first" budgeting!

Pay Yourself First

I could never stick to a hard budget.  If spontaneity is the spice of life, nothing would make that dish more bland than counting pennies while ordering sushi.

My retirement accounts are maxed out.  The HSA is maxed out as well.  (Our "emergency fund" is actually made up of deferred medical spending in the health savings account.)

Do you know how we fund them?  By making them the priority.

We long ago detailed the "Three Account Method", where you can use direct deposit to your advantage to streamline your finances.  The PK household doesn't complicate this too much - investing, mortgage payments, and recurring bills come off the top, followed by our credit card expenses guess.  The remainder goes into the savings account.

2014 Les Paul Signature with White Plastics, One of my new hobby purchases.

What should I name it? (Click to zoom)

So, yes, we don't maintain a "true" emergency fund, even though the savings account has various amounts of cash in it throughout the year.  That account is where the funds for the guitar came from and where any future hobby purchases will come from as well.

Imagine that - your hobby purchases not affecting your plan and cashflow and marriage at all.  Pretty good deal, isn't it?

My Dream of Being a Rock Star... and Maybe a More Realistic One

I'm realistic - I'll stick to playing music casually because the odds of me becoming a full time rocker at this point are close to zero.  That's fine - and as I quipped to my wife when this guitar arrived, "Now I've got better instruments than I would have if I was in a band".  Indeed.

But that isn't the point - the point is that with a bit of initial planning and the odd thought after the fact, you can set things up to still enjoy your hobbies before you are even thinking about retirement.

So, sure, there are "miles to go before I" retire, but in the meantime I'll be tearing my fingertips apart without damaging my cashflow - or my marriage - too badly... because I had a plan to deal with hobby purchases.

 

      

PK

PK started DQYDJ in 2009 to research and discuss finance and investing and help answer financial questions. He's expanded DQYDJ to build visualizations, calculators, and interactive tools.

PK is in his mid-30s and lives in New Hampshire with his wife, kids, and dog.

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