July 10, 2012

What is the first thing that comes to your mind when you think of entertainment? And yes this is a Freudian question.

Is it food? Funny how this family expense crosses the line from essential and necessary to fun.

When does food become fun? Hmmm. Don’t answer that. Especially when you see the obesity rates for Americans.

I draw the line between grocery store purchases and restaurants, bars and fast food outlets. The first reason is the cost – any food purchased outside the grocery store will be considerably more expensive. Fast food is crazy expensive. Your usual combo is over $5.00 after taxes and quickly creeping up to $8.00 - $10.00 each…And, you’ve paid an enormous price for carbs, sugar and salt.

Restaurants offer atmosphere and convenience to the drudgery of peeling vegetables, marinating meats and fishes, cooking, serving and then the fun part, doing the dishes. Restaurants are another respectable temptation for busy work schedules.

Bars and neighbourhood pubs open the door to some of the best tasting carbs, fatty and salty foods anywhere – and the fun part here, the customers are marinated with beer, wine or spirits before indulging in monster-sized plates of nachos dripping in cheese and sour cream, bulging burgers, deep fried buffalo wings, tantalizing garlic ribs or sizzling French fries. The occasional veggie plate might be served up as a side-dish with tasty salad dressings that compete with other high calorie menu items.

It should be quite obvious by now how much more fun it is to eat out than to cook at home. What’s wrong with this picture? Basic health issues are second on my list following the high and excessive cost for frequent visits to eateries outside of the home. It’s so easy to overspend under these conditions, especially when the most common method of payment for entertainment expenses tends to be credit cards.

Canada Revenue Agency (CRA) adds another dimension to the definition of entertainment expenses (subject to a 50% limitation for a tax write-off for proprietors and incorporated businesses):

  1. the cost of tickets for a theatre, concert, athletic event or other performance;
  2. the cost of private boxes at sports facilities;
  3. the cost of room rentals to provide entertainment, such as a hospitality suite;
  4. the cost of a cruise;
  5. the cost of admission to a fashion show;
  6. the cost of entertaining guests at night clubs, athletic, social and sporting clubs and on vacation and other similar trips.

The list for entertainment just gets bigger and bigger. Sports are a huge expense for the majority of families as kids are enrolled in a long list of activities that include swimming, skiing, hockey, skating, soccer, baseball, softball, badminton, tennis, gymnastics and school related sports like basketball, football and volleyball. This is part of the children’s budget for entertainment.

Then there are family related entertainment expenses like picnics and swimming at the local lake or beach, vacations which include Christmas, Easter, spring break and summertime. These all add up when you have children and end up being swiped into reality by the credit card.

Teenagers expect their parents to fund their entertainment expenses too. This may be the place for an allowance in the budget.
Young people also spend a large portion of their incomes on a wide variety of entertainment expenses as the western world values entertainment as a legitimate social activity. This also includes the pursuit for a life-partner.

Entertainment is the most obscure family expense of all. It has been my experience that people kind of close their eyes and hope for the best with this essential monthly and annual family expenditure. A credit card is used far too often because we don’t have the cash to meet the expense – and we feel entitled to a break. Often we just don’t care how much it costs because, well, we don’t have to pay with cash. We can just jump from one reality to another from cash to credit, from consumer to debtor.

What is most needed is a careful itemization of what we enjoy in life, how much it really costs and then make sure we have the cash to pay for it. Otherwise, we are spending more than we bring home, and you know what that means.{jcomments on}

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