How Much are You Splurging on Entertainment? It May Be Less Than You Think
In our constant battle against bills and taxes, and the looming threat of retirement, it can be difficult to confidently spend our money on anything that isn’t related to food, shelter, transportation, health and education. However, a life without some splurging can mean a life without new experiences and much needed stress relief.
Thus, most of us spend some of our money on entertainment. These expenses, whether it’s seeing a live band play at a bar or going to your favorite football team’s playoff game, are not just okay in moderation — they can also be vital to our happiness.
How Much Americans Spend on Entertainment
According to Fast Company, spending money on experiences, such as vacations, concerts or the new Marvel movie, can do wonders for our happiness — far more than buying things. For life to be enjoyable, we need to open our wallets every now and then, and say yes to entertainment, as long as we meet our basic needs.
But how much should you spend on entertainment? This depends entirely on your personal financial goals, current financial status and budget.
Per a report from the Bureau of Labor Statistics, the average American spent $652 in 2015 on admission to various entertainment functions, like museums, plays, concerts, sporting events, movies and clubs.
This also includes money spent on things like gym memberships or participation in a sporting league.It does not, however, include money spent on vacations, your Netflix account or dining out. For the purpose of this article, entertainment will hereinafter refer to this more limited definition.
How We Spend It
Of that $652 average annual entertainment budget, we spend $45.60 on live performances, such as theater and concerts; $42.61 on sporting events, like a minor league baseball game; and $59.50 on movies, parks, museums and similar attractions. We spend the rest on memberships, social events, etc.
While this $652 paints a nice picture that the average American may want to aim for, it doesn’t tell the whole story.
For example, per the BLS data, only 70% of U.S. adults spent any money at all on entertainment in 2012. Of those who spent money, 59.4% saw a movie at least once, 37.4% went to a performance art event, 30.4% went to a sporting event and only 21% went to a gallery or museum.
So what about the 30% who didn’t spend any money on entertainment?
The data does not make it clear whether they chose not to spend due to lack of interest or lack of financial confidence, but my gut tells me it’s the latter.
Entertainment Spending and Our Income
While $652 is what the the average American spends, it is certainly not representative of every American and is skewed greatly by those who make and spend a lot of money.
In 2015, Americans who made less than $15,000 a year, for example, spent just $144 on entertainment, while those who made $200,000 or more spent $3,296 on entertainment — that’s nearly 23 times as much.
The average American, based on the US nominal median income per capita of $31,099, falls within the $30,000 to $39,999 range. In this range, the average annual entertainment expenditure was just $353 in 2015.
College Grads Spend More
There is also an evident growth in entertainment spending that goes along with education level. Americans without a high school diploma spent roughly $75 a year on entertainment in 2015, while those with a high school diploma spent an average of $172.
College educated Americans saw a far more significant jump, as bachelor’s degree holders spent an average of $982, while those with their master’s degree spent $1,479, on average.
Millennials Come Out Ahead
Age, however, tells a different story. Those in the 35 to 54 age range spent the most on entertainment annually as of 2015, but most other age groups are not far behind, save for those under 25, who spend significantly less than other age groups.
However, those in the under-25 age group were more likely to attend ticketed events annually, which indicates that they were attending cheaper or free events.
How Can You Save on Entertainment Expenses?
Before you compare your entertainment spending to whatever cross section of age group, income bracket and education level you fit into, remember that no person’s financial situation is exactly the same as someone else’s.
Instead of aiming to match the national average, spend some time with your budget to decide what you can comfortably spend.
When determining my entertainment budget, I generally budget for everything I want and need first, then I see what’s left over. I take care of my bills, like rent, utilities, car, insurance, groceries and so forth, first, then I take care of my investments, like my IRA, 401k and savings. I also put aside money for emergencies and incidentals.
I know I can safely spend whatever is left on entertainment. In some difficult periods of my life, I can say that I’ve allotted myself far less than the average for someone in my age group, income bracket and education level. And in some far more exciting — maybe more irresponsible — times, I have done just the opposite.
What really matters is that you take your financial goals into consideration before splurging on entertainment, but remember to loosen your belt sometimes and create memorable experiences. After all, that’s what really makes life worth living.
Timothy Moore is an editor and freelancer living in Nashville with his partner and their two dogs.