How does your entertainment spending compare to that of your fellow Americans?

Spending money on entertainment is a luxury, but for many people it feels like a real necessity. After all, who wants to spend their lives without seeing movies, going to concerts, or having fun at trivia parties with friends?

But the key is to keep your entertainment spending reasonable so you don’t deplete your bank account or, worse, end up in debt. To find out whether you’re spending too much, too little, or too little, it can be helpful to check out what your colleagues are doing.

Here’s some data on how much the typical American spends to have a good time.

Here’s how much Americans spend on entertainment:

According to a study by Ramsey Solutions, the average American spends 4.7% of their income on entertainment.

This spending category includes streaming services, pets, electronics purchases, and any hobbies people like to engage in. This also means that the average American spends about $288 per month on entertainment.

This makes entertainment more expensive than other types of discretionary spending. For example, the average person spends about 2.7% of their income on clothing and services, or about $162 per month. That’s more than $126 less than they spend on entertainment.

Your overall budget affects your entertainment spending

When comparing entertainment spending to what most people pay, it’s most helpful to look at the percentage of income spent. After all, someone who makes $20,000 a month is going to spend more money on fun purchases than someone who makes $2,000.

The key is to prevent your knitting habit or baseball card collection from costing so much money that things get out of hand and you end up in credit card debt or unable to achieve other financial goals. And if you’re investing more than 4.7% of your income in entertainment, you’re probably is Excessive spending in this budget category.

In the end, it’s a good idea to keep 20% of your money for long-term goals and limit your fixed expenses for necessities to 50% of your income. That leaves 30% for everything else. Besides entertainment, like grocery costs, there are a lot of other things that will go into that 30%.

Are you spending too much?

You can determine how much you spend on entertainment by reviewing past credit card and bank statements and adding up spending on concerts, sporting events, movies, or other fun activities you participate in. If you use budgeting, the app is super easy to categorize your spending. If not, just type the numbers into a spreadsheet.

Once you know how much you are spending, compare it to your income. If you’re spending more than about 4.7% of your money on entertainment, it’s worth asking yourself how much you can cut back on. Perhaps it would be a good idea to look for free activities in your area. You can find great free events of interest to people of all ages through local social media pages, libraries, and community centers.

it’s your money

That’s the reality your Your money and spending habits should align with what’s important to you. If you’re not interested in clothing and can afford to shop at thrift stores to see Taylor Swift on her Eras tour, there’s absolutely no problem. As long as you realize there is a trade-off. You may have to sacrifice something else.

That’s why comparing your spending to others only helps reveal what you should do with your money. what do you do don’t What you might want to do is sacrifice your retirement savings or build up an emergency fund to spend more money on entertainment. But if you’ve got a big job done and paying for your hobby is going to use up most of the money you have left, plan for that and you’ll be fine.

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