Pricing Luxury: What Should You Spend On A Hobby?
How much should you pay for something that is purely a “want”, not a need? There are formulas for what house you can afford, how much of your budget should go to utilities, etc. but what if it’s something you just plain want?
Recently my sewing machine went kaput. Seventeen years ago it was top of the line, and since I’ve been sewing since I was 10, I figured I’d replace it with whatever was currently tops—I’ve earned it, no? When I was in my chocolate-chip-cookies-Mommy phase, I made all of dear daughter’s clothing for about her first five years of life. It was “free” because I’d inherited a closetful of fabric from my aunt in the nick of time. The machine at the time cost me $3,600, so clothing my daughter cost me about $720/year if I amortize it over those years. And of course I got 12 more years of use out of it, and the joy of having something really, really fine. Totally worth it.
Fast forward to about a month ago. I remember when machines lasted forever, but apparently not so with the new super duper computerized models. Like every other computer I’m forced to wrestle, eventually they have a nervous breakdown and fail spectacularly and totally, throwing all plans and projects into complete disarray. Sound familiar? I’ll just go get another one—computers have gotten far cheaper in the past 17 years.
Whoa, baby. Replacing my machine with an equivalent model is now about $7,500. A top of the line model (a Bernina red job) clocks in at $13,000. For that, I think it ought to drive you to the store to buy more fabric. It’s particularly a shock compared to the cheaper (in real terms) prices of other big ticket items like cars and the aforementioned computers. I wish Wall Street had done as well in the same time period.
So how do you assign a price to what you “should” pay? Well, for $7,500 I could be in head to toe Armani and bag the sewing entirely. For $13,000 I could buy my kid a crappy used car but since she won’t learn to drive I can probably put that one off. Unless you’re Bill Gates, there are always tradeoffs (and he probably doesn’t have time for hobbies anyway. Actually, neither do I.)
Let’s not kid ourselves that our hobbies save money. I know I spend more cooking organic food with fresh herbs than I would eating out every day at Subway. I get an excellent quality garment when I sew, but I’d probably never buy that level of retail—my clothes tend to be Eileen Fisher, not Armani, and you still have to pay for fabric. Whether it’s a boat, or new golf clubs, or a sewing machine, how can you pick a price?
- What will it cost per year over its expected life? Let’s take 10 years for a sewing machine. Even though it comes with a 25 year warranty, I don’t expect anything electronic to last that long—computer technology just moves too fast. Working with my $7,500 example, the thing will cost me $750 a year, or $62.50 a month. Will I save that much? Borderline—if I made 2 suits, a shirt, and a pair of silk pants, maybe.
- Does it have maintenance or corollary costs? For a boat, gas, maintenance, a place to dock or store it, maybe a trailer to haul it, bigger car—there’s a reason why people say a boat is a black hole in the water where you pour money. For a sewing machine, it’s a question of restraining yourself from buying more and more fabric, books with cool ideas, new gadgets, a yearly tune up ($100), etc. That’s what a hobby is, but you need to consider that one purchase will likely make you spend on more purchases. For me, the books, gadgets and tune up probably add $300 a year. I’m not telling on the fabric.
- What’s the entertainment value worth? The 750 bucks is about the same cost as season tickets to the opera and a movie a month. I’d rather have the sewing machine than the movies, and now that dear daughter is off to college, I’ll probably cut down on the number of operas. Or think of it as a weekend away—definitely worth it for me by this measure.
- Have you wanted it for a long while, and scoped out what’s available? Impulse or crisis purchases tend to be less satisfactory. Even if money is no problem, I recommend connoisseurship—if you really know what you’re buying, and know it’s perfect for you, you’ll get far more value and satisfaction from your purchase.
- Drill down. Once I started sitting in the driver’s seat, I discovered that there are some cachet issues—some brands have a tremendous snob value (what a surprise). Even if you know what you want your purchase to do, there are so many improvements that you may discover you can do stuff you never even knew you wanted to do. But the less advertised brands may be trying harder, and offer a lot more.
- Check out warranties and trade in value. Maybe you don’t have to go quite so large immediately if you can get good trade-in in the future. Get used to the new offerings and changes and see if you really value or use them.
- Is there a resale or pass-it-on value? If you upgrade before the wheels fall off, there might be enough resale value to make a big purchase be a smaller net purchase. Or your child may be salivating to steal the darn thing right off your desk.
So what have I ended up with? After test-driving a bewildering array of brands, reading a lot of reviews on the internet that I really didn’t have time for, and making a chart of features and cost per year (what did you expect? I’m a financial planner), I finally popped for a $1,600 Brother “pre-loved” with full warranty and trade-in value. My kid figures she’ll sweet-talk me out of it in about 2 years.