Budgeting has been on my topic list for a while, but it's an easy one to skip over. Let's face it, it's much more fun to write about pens, inks, notebooks....OK pretty much anything else. But Andi over at Fountain Pen Physicist kicked off the year with a great video post about her fountain pen budgeting plans, and it inspired me to share my approach as well.
The Spending Spiral
I'm sure my initial experience with fountain pens was a familiar one to many. It started off inexpensively enough, but it escalated quickly. Even sticking with entry-level fountain pens at first, it's pretty easy to throw $15 here and $30 there at pens, inks, spare nibs, and notebooks. They are inexpensive enough to be impulse purchases, but they do add up (both physically and financially).
The real challenges started when my taste in pens began to evolve. That first push over the $100 mark for a pen was a hard one. But I had a such great experience with my first "expensive" pen (a Vanishing Point) that I continued to seek out better (and more expensive) pens.
My wife could see that I was really enjoying the hobby, and she never gave me a hard time about my pen purchases. (The fact that she has some expensive hobbies of her own didn't hurt.) At the same time, I started to feel some guilt whenever the monthly credit card statement rolled around. Also, since spending hundreds of dollars on pens is inherently kind of insane, the line between quirky insane and financially reckless insane gets a little blurry. After all, is spending $300 in one month on pens really that much more crazy than spending $100 in one month on pens? (Let's call this the Modern Stationer Law of Diminishing Crazy.)
Creating a Fun Fund
If you're a fellow fan of The Pen Addict podcast, you may be familiar with the term "space credits." It was coined by Ed Jelley on Episode 98 and has come up on the show regularly since then. It refers to those little slush funds in places like PayPal from which you can spend with impunity.
About a year ago, I decided to formalize my space credit management approach. Since PayPal is an annoying piece of crap somewhat limiting, I decided to look for another place to keep my space credits. I have a AAA membership (an auto club here in the U.S.), and I discovered that my membership card actually has a built-in American Express prepaid card. Once you load it up with some funds, you can use it anywhere that AmEx is accepted and make cash withdrawals at ATMs.
After discussing it with my wife, I activated separate AmEx prepaid accounts on our respective AAA cards to serve as our individual fun funds.
Funding the Fun
I somewhat arbitrarily picked $100 as the amount to transfer to each of our prepaid cards every pay period (twice monthly). To be clear, I don't spend $200 per month on fountain pens (usually). Some of my other hobbies like photography come with their own healthy space credit appetites. We also use space credits for "want, but don't really need" things like iPhone and iPad upgrades. We don't really have a firm rulebook for which purchases need to come out of space credits. We both kind of know it when we see it.
In addition to the baseline recurring deposits, I try to throw any bits of "found money" into our accounts. I occasionally get one-off checks for things like car mileage expensed to my company, reimbursement for routine healthcare expenses from our flexible spending account, etc. The original expenses for these things just kind of get absorbed into the day-to-day family finances, so I split whatever we get back 50/50 between our accounts.
Since adopting this approach, I've also become much more proactive about selling things that I am no longer using regularly to boost my budget. For example, I sold several bags I was not using to fund the purchase of a new bag that I had my eye on. I sold some underutilized pens to fund a camera lens purchase. I used the Amazon trade-in program to convert my old headphones and iPhone into a new pair of headphones that I was coveting.
None of this is rocket science, and I'm sure this is the same way many of you build up your space credits as well. The point is that in my case I wouldn't be doing these things if I didn't have a very clear budget for hobbies and fun. I would just keep buying new stuff on the family credit card and letting the old stuff pile up around me.
In addition to the negative financial implications of this, it also just feels kind of lousy buying a new bag when you have five other expensive bags sitting around. Feeling guilty about your hobbies defeats the purpose of them.
Mindful Spending
The idea of feeling good about my purchases is probably the best part of the approach. Now that my fun budget lives and dies by that space credit balance, I am much more thoughtful about my purchases. I don't make nearly as many "oh, it's just $30" impulse purchases. Even if I know I really want something, I'll often let it sit for a few months before pulling the trigger.
Often, my priorities end up changing. When I do eventually click the buy button on something, I feel much more confident in the purchase. I appreciate the item all the more knowing that it's something that I've been wanting for months and consciously prioritized over other things that I want.
That's not to say that I don't ever get an itchy trigger finger, but it happens far less often than it used to.
Space Credits 2.0
The American Express prepaid card approach worked well enough, but I decided to step it up a few months ago by shifting my space credits over to Simple, a mobile-centric banking app. This made it much more convenient for me to check my balance, monitor transactions, and initiate transfers right from my phone.
But one of the coolest aspects of Simple is the budgeting feature. Rather than displaying a traditional account balance, Simple has a concept called the "Safe-to-Spend" balance. It also has a nice goal budgeting feature that lets you put aside money for something specific either immediately or over time.
If you create a future goal, it will slowly drip a little bit each day out of your "Safe-to-Spend" balance and put it aside into a separate bucket for the goal. So you end up with a running balance to work from for ad hoc purchases while you save up for bigger items in the background.
That said, Simple is not perfect. They did major overhaul of their platform last year that went badly. They handled all of the glitches very well from a customer service standpoint, but it was still kind of annoying and unsettling. Things seem to have stabilized now. Simple also doesn't yet support automatic recurring transfers. It's not a huge deal, since I can schedule them right from my phone, but it's just one more thing that I need to remember to do.
All in all, the pros outweigh the cons with the change, though.
Final Thoughts
It seems kind of silly that I need to set up a convoluted system like this in order to spend responsibly. But it has really helped me enjoy and appreciate my hobbies more. Also, you could read something negative into the fact that my wife and I maintain separate accounts for fun, but this has actually created a very positive dynamic.
The overwhelming majority of our finances are managed jointly. But having our own separate space credit funds makes it easier to root each other on and celebrate each other's purchases. In my wife's case, celebration occasionally takes the form of shaking her head at my decisions. But it all takes on a "whatever makes you happy" vibe instead of a "you put WHAT on the credit card?" vibe.
Ultimately, it's not really important where you put your fun money and how much you put aside each month. But (1) giving yourself a rolling fun "account balance," (2) funding it regularly at whatever level you can afford from your paycheck, (3) hustling to find other funding sources, and (4) making it easy to access your space credits for purchases can really increase your enjoyment of fountain pens and other hobbies without setting you on the road to financial ruin.
