Anyone that doesn’t rely on gifts for getting new games needs a budget. This budget serves two purposes. First, it is a statement of intent on how you want to spend your resources. Second, it is a tool to control whether your actions are in line with your intents. A budget also very simple to implement. If you can calculate your change when you pay at a store you can have a fully functional budget.
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The first thing you need to do is to get an idea of the rough landscape, the fixed monthly costs (or any other time unit) that you currently have. This is the money that you need for keeping your life going the way it is as well as any other recurring charges. This includes food, gas, power, travel money and anything else you know you will need to pay for.
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The second thing you need to know is how much money you receive per unit of time. This comes second because if you see that this amount is less than or dangerously close to the previous one… well, you’re in trouble. Assuming that you are not just barely scrapping by, we can continue (if you are just making it, there are a bunch of stuff you can do to improve your financial situation but I won’t cover that here.)
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Third is making a rough estimate of your lifestyle expenses. These are things that you could cut down on (e.g. having a cup of coffee at the diner before coming home from wherever…) but you usually do because you like them or have any other relevant reason.
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You better save *some* money.
The fourth step is deciding what your savings are going to be. Having a comfortable cushion of money is vital in any economy that indeed uses money. This capital can be used in several ways, only one of which is to stay below your mattress or in your bank of choice. The main thing here is that you generally want this amount to stay the same in the long run (sans change in your overall financial situation.) When you decide on a goal figure, think about how much time would you like to devote to building up to that golden number. Simple math will tell you how much you would have to save monthly to get it.
By the way, if at any step of this process you find out that your current income source does not cover for all of this you should start looking into alternative sources of money or more efficient ways to make it. Don’t scale your goals down to your current resources, only scale your current expenditure of resources to your current resources.
Once you’ve taken this into consideration you are left with a sum of money. In theory, that is the most amount of money that you can spend on games per month (or any other relevant time unit.)
Before we figure out if this amount of money will suffice for your hobby we need to take something into account: the value you ask out of your games based on your resource input. Simply put, what the game must do for it to be a worthwhile purchase. In my particular case I try to think of what amount of money would I pay to be entertained by something new and how many of these hours would I like to have per month. For instance, currently I require my games to give me one hour of entertainment for every 2,50 USD that I put into them. I thus know that (in general) a 10 USD game would need to entertain me for at least 4 hours for me to consider purchasing it. This is a general rule, but it works. There might be exceptions but you need to realize that either they are just exceptions or your are working with different values and you might as well be honest to yourself and say that you are willing to pay more or less for an hour of entertainment. A word of advice, think about how much you play your games. Have you ever made an account of your day to have a look at how your spend your time? It’s an eye opener to many people. Observe your habits for a week to get a good idea of how much of your time do you use to play your games.
Take that information and compare it with the maximum amount you have to spend on games monthly. You might find that the maximum amount you currently have does not match what you want to spend on games. If it is more then you have no problems, you have more money to spend on other hobbies or any other thing you can think of. If you have less there are a few (very common sense) things that you can do to increase it with your current resources. For instance you can reduce other non-vital expenses to increase this one. Before doing this, think about your priorities and the value that each area brings to your life.
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The last step is. Don’t spend more than what is on your budget. This is simple… but very hard (for most people, myself included) to do. As always, this is a general rule, but as with any general rule exceptions must be exceptions. If you generally spend more than your budget be honest with yourself and acknowledge it. If you want to expand your budget you either have to get more resources or reduce some other areas you put money in. If you spend less, you can always save it for big purchases that require a lot of money up front or you can reduce your budget to reflect what you actually do want to spend.
Done, you win!
