How to Make Room for Your Passion in Your Life and Your Budget

Most of us have something that we absolutely love to do — and it’s usually a passion that allows us to express ourselves and our creative sides. Whether it’s music, art, writing, volunteering, or consistently picking up something novel and learning something new, we all have a passion or two that’s important to us.

But as you’ve probably noticed, life often gets in the way of that passion.

Why don’t we do what we love more often? In most cases, there are two major roadblocks that get in the way of pursuing your passion: time and money

If you want to overcome both these obstacles, these 4 tips will help you make room for what’s important to you both on your schedule and with your budget.

Evaluate How You Spend Your Time Now

It’s hard to make time for something if you don’t know where your time goes right now. Try tracking your time for a few days to a week and find out exactly how many hours you spend:

  • Working
  • Sleeping
  • Doing chores or running errands
  • Having free time

…and so on. That last one is really important. How do you currently spend your free time when you don’t need to work or complete tasks?

If you’re anything like the average American — who spends 3 hours per day watching TV — you likely have more time for leisure than you initially thought. It’s just that you pack it full of activities and feel constantly busy.

But look at what those activities break down to be. If you simply stopped watching TV on weekdays, you could have 15 hours per week to devote to a hobby or passion project.

Evaluate how you spend your time right now. Get really granular with it. And then cut out what’s unimportant or not valuable. It’s all about getting intentional with how you spend the time you have.

Cut Out What’s Not Essential

This idea applies to your budget, too. If you struggle to come up with money to spend on your passion, take a look at your current spending. Do you make purchases that align with your values? Or do you find you often suffer from buyer’s remorse?

It’s always easier to spend money than it is to save it. But cutting back doesn’t need to be painful if you start by identifying where you spend money on things that are not important to you.

Carefully track your spending for a month. Then, look back at your purchases. Moving forward, eliminate anything that you didn’t get a lot of value out of, made you regret your purchase, or did not enjoy as much as you would enjoy pursuing your hobby.

If you still need to cut back, you may need to make a few sacrifices or tradeoffs. Would you prefer to go out to eat three times per week, or cut back to once so you can spend that money on your passion instead?

It doesn’t need to be about depriving yourself or eliminating things from your life entirely. What’s more effective is to recognize what’s essential and invest your time and money in whatever that is for you.

Schedule Everything

Once you make room in your calendar, schedule in time to spend pursuing your passion! If you don’t fill in that extra time intentionally, other nonessentials are sure to start slowly creeping in and stealing your time away again.

Even if you can’t free up large blocks of time, organizing your current schedule to spend your time more efficiently may help make room for a hobby or pursuit that interests you. Can you bundle tasks together? How can you structure your days so you’re more productive, and therefore necessary tasks get done faster?

Explore different ways of organizing your time, tasks, meetings, and other priorities.

Monetize Your Hobby

These ideas can help you reallocate the resources you already have. But sometimes, you don’t simply need to reorganize. You need to make more.

If pursuing your passion would be easier if you had more money to devote to it, consider how you can monetize that hobby.

Musicians can look for small, weekly gigs that pay a few bucks. It may not be enough to live off of, but it’s a nice bonus to in addition to spending time doing what you love.

The same can be said for any kind of artist or skilled worker. You can sell what you produce or even spend some time using your abilities to freelance. You could also get paid to teach others something you love and feel passionate about.

There’s no need to feel limited when it comes to engaging in activities that light you up and allow you to express who you are. When you take the time to look at your what’s essential to you, the way often becomes clear.

Put those things first and make them a priority. Cut out what doesn’t contribute to your values, and allocate those resources — be they time or money — to what does.

Why Your Retirement Is More Important Than Saving for College

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Yes, it sounds harsh. But this is an important financial reality to understand: you should prioritize your retirement savings over saving for your kids’ college expenses.

This isn’t about loving your kids less. It’s about knowing how to prioritize your financial goals in the best possible way for both your sake and theirs.

And remember, putting your retirement needs ahead of saving for college doesn’t mean indefinitely choosing one over the other. You can balance both these competing goals and fund each at the same time.

Here’s why your retirement savings is that important — and how you can balance your desire to help your kids by saving for college while also making sure you take care of yourself.

There’s Only One Way to Fund Retirement

Our kids have countless options when it comes to higher education and paying for it. We give them whatever help we can. They can contribute themselves by earning scholarships or working part-time as they go through school.

There are plenty of ways to reduce the cost to make college more affordable, too. They can choose a lower-cost, in-state university. You can help educate kids on how to live frugally and limit their expenses while still in school.

And while it might not be ideal, students can take out some student loans to help fill the financial gaps. This is not the same thing as taking out far more than they can reasonably expect to repay once gainfully employed after graduation, or taking out more loans than they need to pay for tuition.

The point is, our children have several ways they can fund higher education or reduce the expense of college.

But when it comes to retirement? We’re mostly on our own.

We need to take responsibility for funding our lives after work. Social Security and other benefits can help, but these aren’t guaranteed (or likely to completely fund what you need for the rest of your life).

There’s not much flexibility on where to get this money — or how long we have to fund our retirement goals. If we don’t save and invest now during our working years, we may need to keep working or dramatically change our lifestyles.

Saving for Retirement Helps You and Your Kids

Still, many parents feel averse to the idea of saving for their own needs ahead of helping their children. But it’s just like the idea of the oxygen mask on an airplane: you need to address your own needs before you can realistically help anyone else.

You do no one any favors — least of all your children — if you fail to plan for your retirement and end up needing someone to help you. That burden will likely fall on the very children you wanted to help in the first place!

By prioritizing your retirement ahead of financial goals like saving for college, you ensure that you take care of yourself after you stop earning an income. Your adult children won’t need to use their own income to financially support you.

How to Save for College Without Neglecting Your Retirement

None of this is to say you shouldn’t save for college to help your children. You should allocate money to fund your own retirement goals first. But you can contribute what you can from your cash flow to college savings after that.

Make sure you take advantage of employer benefits and packages that are available to you. Contribute at least enough into your 401(k) to get the match, and fund tax-advantaged accounts that can lower your year to year tax burden.

By doing what you can to save on taxes, you might have more money left over throughout the year to use for college savings.

You can also make the most of college savings dollars by investing them into an appropriate vehicle for long-term growth. If your kids are younger than 10, they have nearly a decade to go before starting their freshman year at a university.

Take advantage of that timeline by investing into a 529 plan or another brokerage account. As they get closer to attending college, you’ll want to adjust the plan to keep that money as safe as possible.

Don’t put pressure on yourself to fund 100% of your child’s higher education, either. As your kids get older and can better understand financial realities, make them part of the conversation. Giving them the knowledge that you agree to fund up to 50% or 75% of their university expenses can help them make informed decisions about which schools to apply to or what programs to consider.

And don’t forget to encourage your kids to participate and make their own contributions. That doesn’t need to be financial. They can do their part by achieving academic success that secures scholarships and grants. Or they can commit to certain sports or programs that provide a path to a subsidized university education.

Every parent wants to help their children succeed and have a better life than they enjoyed. While saving for college is one of the primary ways you can do this, remember that your children can appreciate your help after graduation, too.

The best way to make sure they can live out adult lives in which they get to prioritize their own financial goals over your financial needs is to fund your retirement first. Once you’re on track there, then you can turn to saving for college and other goals.

Make the Most of Your Vacations: Save for Travel, Not a Vacation Home

 

A vacation home works for some people and can provide a lot of benefits. It’s wonderful to have your own place to escape to when you’re ready to relax and unwind. And if you make good decisions about where and what you buy — and get a little lucky in the process — a second home can be an asset.

 

But the key point? It works for some people and certainly not all. In fact, for most people saving for travel instead of a vacation home makes much more financial sense. It also ends up better for you in the long run regarding happiness and enjoyment.

 

That being said, it’s well worth understanding how to make the most of your vacations, you’re better off saving your money for trips, experiences, and various destinations — not a second home.

 

Vacations Are Fun and Games — Vacation Homes? Not So Much

 

Buying a vacation home often makes you a second-home owner. With homeownership usually comes with a second mortgage, property taxes, insurance, the responsibility for repairs, managing a property that may be far away, potentially managing renters (or paying someone to manage that process for you), and so on.

 

In other words, it may sound fun and exciting. But don’t get swept away thinking about all the benefits. Vacation homes come with all the downsides — and potentially even more — of any property you own, pay for, and are responsible for taking care of throughout the year.

 

Add in handling those responsibilities over distances, and a vacation home is often a fast-track to frustration (and a lot of work, to boot!).

 

Make the Most of Your Vacations by Maintaining Your Freedom to Choose

 

Those downsides don’t even account for the fact that owning a vacation home tends to mean you’re locked into the same vacation year after year. Again, that might be fine for some folks — but for most people, the freedom and flexibility to vacation in various places and explore new things is worth a lot.

 

You may remain stuck with one type of vacation for as long as you own your home. And even if you’re not, that begs the question: why bother with the vacation home in the first place? Keep the freedom and spend that money on taking dream vacations wherever you choose to go.

 

The Benefits of Saving for Travel

 

Still not convinced? Consider these reasons you should save for travel instead of plunking your money down in another property that you’ll only use a few weeks (at most!) out of the year. You’ll get:

 

  1. The opportunity to explore and visit more places.
  2. The option to take different kinds of vacations (cruise, beach house, camping, etc.).
  3. Increased flexibility (where you go, when you go, how long you go, how many people go, etc.).
  4. The ability to budget for “that one big trip” you’ve always dreamed of (maybe three weeks in Southeast Asia, or a month in Europe) by spending less on travel in the year or two leading up to the trip (such as a camping and hiking trip at a national park).
  5. Fewer unexpected expenses, since you don’t have to worry about vacation home repairs, furniture, the air conditioning going out…
  6. The freedom to follow the deals and to pick vacations based on deals you find online, without being locked into any one place.
  7. Simplify your life with greater peace of mind.

 

Travel Can Keep Your Other Wealth-Building Goals on Track, Too

 

Traveling, as opposed to a vacation home, can keep your other financial goals on track because you can spend significantly less on travel (even luxury travel) than you would buying and maintaining a property. Travel gives you more flexibility in how you use your money, even to the point of choosing not to travel.

 

As your life circumstances change — you suffer an injury or illness, get married, have kids, take care of an elderly parent — travel may not be the right fit for a few years. And that’s okay. You can save your money and explore places closer to home while you need to prioritize other things in life.

 

While you can choose how and when you travel, you can’t choose to not pay your mortgage on your vacation home if another savings goal or family need becomes a priority that year. When purchasing a vacation home, you lock yourself into those expenses year after year — even when your goals, financial situation, and interests change.

 

What to Think About If You’re Set on a Vacation Property

 

If you do choose to forge ahead with a vacation home, here are just a few points you’ll want to keep in mind:

 

  1. Make sure you know the neighborhood and surrounding area. Is it a place you are going to want to visit for the next 30 years or more (assuming a 30-year mortgage)?
  2. Are you going to have renters? Keep in mind that you have to a rent a vacation property for large chunks of the time if you want to receive the tax benefits. This usually means making the most popular weeks available to renters — not your family.
  3. Renting a vacation home often requires hiring a management company, or managing it yourself. It also means more wear and tear on the furniture and property. Account for this when you look to see if your budget can handle a second home.
  4. A vacation home is more than the price of the home. It needs to be furnished, maintained, repaired, and insured (and often vacation homes are in costly areas, such as a beach house on the water). Again, account for these expenses when you consider the financial aspects.

 

There are so many benefits to saving for travel rather than tying money up in another property. Remember, you can’t buy your freedom – and a vacation home certainly takes some of that away.

 

At the very least, if your heart is set on a vacation home, do a lot of research, planning, and consideration before jumping in feet first. Understand all the pros, and more importantly, all the cons before committing. A vacation home may make sense if you fully understand the consequences and downsides and feel those sacrifices are worthwhile.

Whichever way you choose to enjoy the money you use for vacations and other fun experiences, make sure it aligns with what’s important to you and your values.

Budgeting for Coffee Sucks, Try This Instead

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Trying to cut back on your spending gets tedious when you focus on minute details. Yes, it’s important to track every dollar — but to feel anxious about spending on small purchases that you value because you’re trying to save more and spend less? That can quickly lead to budget burnout.

 

Preparing for and responsibly purchasing big-ticket items (from a laptop to a car to a house) is much more important than counting every last penny. Think about it. Does it make sense to stress over buying a coffee or spending an extra $1.99 to add guacamole but to have zero plan when it comes to major purchases?

 

Quite frankly, budgeting for coffee sucks — and it’s not worth your time or effort to pour your energy into everyday items instead of looking at the big picture and failing to prepare for big expenses.

 

You want to make responsible decisions on the big stuff. A few coffees won’t break the bank and deserve a place in your budget if your daily latte is truly important to you.

 

But buying “too much car” or “too much house”? That’s where you can run into major financial trouble.

Cutting Out Lattes Just Doesn’t Cut It

Focusing on small expenses, like your coffee fix doesn’t do much to impact your budget, cash flow, and ability to save and invest if you fail to examine your larger purchases.

 

If you spend $5 every single day of the year on coffee, you will spend $1,825 throughout the year. Now, that’s no small number. But perhaps all you need to do is cut your coffee consumption by half. You still get to enjoy your latte multiple times per week while also saving $912.50 per year.

 

Compare that to obsessing over the tiny costs and nickel and diming yourself. You’d save some more. But you’d also likely be stressed out and less happy. And the bigger issue? You might exhaust your decision-making power by constantly denying yourself a small pleasure.

 

You need that financial willpower more when it comes to big depreciating things, like cars and boats, etc. Let’s image you purchase a car today and lock into monthly payments of $250 for five years. That means you give up more control in the future on what you can afford to buy(and how much you can save and invest) because the $250 is already accounted for, every month, for five years. All in, that’s $3,000 a year and $15,000 over five years!

 

It’s a much more dramatic impact than budgeting for coffee.

 

The Impact of Big Expenses on Your Budget Over Time

 

Take this one step further. Say you spring for the extra fancy model of the car. If your monthly payments were $500 for five years because you financed a more expensive car, that’s $30,000 worth of cash that you devote to this one expense.

 

That’s the other thing about budgeting for coffee: you can change your mind anytime about how much you’re comfortable spending on those little things. Big purchases that you pay for over time? Not so much. You commit your future budget to being limited for years.

 

If you took that same (lower) car payment of $250 and invested it instead every month over five years, you would have about $17,000 assuming a 5% rate of return. Leave that money alone for 30 more years until retirement, and at 5%, you’ll have $73,500.

 

It’s important to think bigger and look at big-ticket items that can drain your cash flow for years to come. While cutting things like a daily latte can help you reduce costs, prioritize preparing for bigger purchases first and don’t set yourself up for failure by depriving yourself small pleasures like coffee from your favorite cafe a few times a week.

 

Instead of Budgeting for Coffee, Create a Big-Picture Plan

 

Try this relatively simple process to review your big-picture budget without getting into all the details of every single purchase:

 

Take your last pay stub and find the net amount (after taxes and deductions for your retirement account, health insurance, life insurance, etc.).

If you’re paid once a month, the net amount on your last pay stub is what you want. If you’re paid twice a month, multiply the number by two. This is your net monthly income.

List every single fixed expense you have and how much each one costs you, on a monthly basis. These expenses may include your mortgage, utilities, insurance, other debts to repay, taxes, etc.

Add up the monthly cost of each fixed expense.

Subtract the total amount you spend on fixed expenses in #4 from the net amount you earn each month from #2.

The difference is the amount you have to spend each month on everything else, including savings.

 

The best way to increase your discretionary spending (and more importantly, your ability to save), is to knock off or reduce some of the fixed expenses.

 

This may mean spending a couple of hours shopping for cheaper car insurance. Or, if you’re spending more than you earn each month, it may mean a change as drastic as moving to a less expensive place to live.

 

Here’s an example:

 

Net monthly income = $6,000

Fixed expenses = $4,000

Difference = $2,000

 

That $2,000 has to cover all your food, gas, entertainment, gifts, shopping trips, everything for the month. That includes savings and other investments outside what you automatically contribute to retirement from your paycheck.

If it’s not enough, look at your large recurring expenses and see what you can cut. You may need to sell the expensive car and get a cheaper one. You may need to reconsider major luxuries in your lifestyle that seriously drain your budget of cash to put on things that are ultimately more important to you — like being able to travel, save for a big goal, or retire sooner to spend more time with your family.