how do you budget for your coin purchases?

P0CKETCHANGE

Each of us has a unique financial situation, level of disposable income, and collecting pursuits. Many think about collection goals (especially this time of year) which some have shared in the 2021 thread by @DNADave — this got me thinking...

How do you budget for your coin purchases?

P0CKETCHANGE

Personally I find the constraint of a budget critical and consider it an asset, not a liability. It forces me to be patient and selective in order to maximize my enjoyment from limited funds. It also means I have to be disciplined especially when I'm looking to make a large (for me) acquisition.

My process is simple. Once a month I set aside a small single-digit percentage of my after-tax income and put into my "coin money bucket". This funds all of my purchasing activity. In addition, when I sell items, the proceeds go back into the coin budget as well. This helps me churn out some of the stuff I've accumulated that is not core to my collecting interests.

This method also keeps me from second-guessing my purchases, or from letting other external financial stuff from weighing on my decisions — whether there is $20, $200, or $2000 in there, I am 100% comfortable spending that amount if it's a coin I like. I'm sure this approach would not work for everyone, but it works well for me.

Panda4456

Sometimes I sell a couple coins before I buy my next one. I sell the ones I don’t want as much anymore or if they are in a lower grade and I want to upgrade. That way I’m Only paying the difference in cost

AlanLastufka

I have a running spreadsheet that accounts for purchases and extra spending money that I set aside for fun purchases. That extra money gets spent on music (physical media box sets, CDs, etc), movies (4K UHD BluRays), and coins. I'm retired so my income comes from dividend investments, some of which pay out monthly, some quarterly, and a few once a year. So some months I have more fun spending money than others. If I want to make a larger purchase and it's on a timeline (an upcoming auction), I sometimes sell generic precious metals or generic graded coins to raise the funds, if I don't have them.

ricko

I do not buy many coins anymore.... a few that I really like each year. Since I am not building sets or buying many, I do not budget for it... I just buy the few coins I like. Years ago, I was more conservative, since I was building sets and acquiring others that attracted me. Had to budget between coins and firearms Sometimes a tough choice back then. Cheers, RickO

WAYNEAS

@ricko said:
I do not buy many coins anymore.... a few that I really like each year. Since I am not building sets or buying many, I do not budget for it... I just buy the few coins I like. Years ago, I was more conservative, since I was building sets and acquiring others that attracted me. Had to budget between coins and firearms Sometimes a tough choice back then. Cheers, RickO

I share your interests

TurtleCat

The budget for me is very flexible. I always make sure all essentials are paid plus plenty for a rainy day and plenty for retirement. And then I spend a small part of whatever is left. I’ll flex as I need. I spent a lot in Jan-April but much less the rest of the year. I’ve also sold/traded a lot as I’ve been focusing.

Joe_360

I sell W quarters on eBay, last year and this.... Silver for pennies

CoinHoarder

I bought most of my, what I consider, expensive coins, many years ago when I was still working. I would work OT and put the money aside to make the purchases.

And, when I bought my 1909 S VDB Lincoln, 1916-D and 1942/1 Merc Dimes in the early 90s, I put the coins on layaway at my LCS. I paid them off over a period of months.

Now that I am retired, I no longer buy expensive coins. I pretty much already have what I have always wanted and could afford.

All my purchases today, which is mostly bullion and reasonably priced slabbed silver coins, is made with my discretionary income.

Boosibri

What is a budget?

2ndCharter

What is a budget?

I totally agree - when something comes along I really want, I commit to the purchase and then figure out how I'm going to pay for it. Many times, the opportunity to buy is rarer than the item itself. Fortunately, I've been involved in the hobby long enough and established a reputation that numerous dealers and collectors can trust my word that they will get paid in a timely manner.

ShaunBC5

I squirrel away excess cash when I can, so it's not shown in the accounts I use to budget important things out of. I get some cash for birthdays and Christmas still (or permission to spend what would have been my gift from the wife on coins) and hold that until I find something I really like or it burns a hole in my pocket and I buy the next coin that strikes my fancy.
I feel like I'm getting closer and closer to selling/trading in order to make my collection nicer over all. That's probably coming in the next year or so.

Hydrant

If I needed to budget to buy a coin I wouldn't buy it.

1630Boston

@ricko said:

. Had to budget between coins and firearms Sometimes a tough choice back then. Cheers, RickO

Still a tough choice today

ricko

@1630Boston.... Agreed... and the last few years, the firearms have won.... Cheers, RickO

ReadyFireAim

I'm not pecuniarily responsible enough to abide a budget.
Fortunately, the coins I feel compelled to buy don't come around often.

Elmhurst

I tend to buy a lot within a time frame, then stop for about the same amount of time to review what I have, may want to sell, and what direction where I want to go next. I doubt this is the best method, but it's just how I operate.

TennesseeDave

Back when I lived from paycheck to paycheck I wanted more than I could afford and would go in debt for stuff. Now that I have everything paid off and enough money to buy almost anything I could want,( within reason of course) I do not want as much. I buy the coins I like, but only if the price is right.

pursuitofliberty

Pretty simple ... after all the primary needs and contingencies are funded and taken care of, I mentally divide the rest between things and experiences.

It's okay if I spend all of it in both piles ... what did the kids used to say? YOLO ... but once it runs out, I have to wait to add money back into those piles through income or sales or ? And since I generally know what is in both piles down to a pretty close margin, I know what I can and can't do.

The experiences pile has grown a lot this year, while the things pile took a pretty big hit.

Fortunately I have a steady stream and after years of having to rub two nickels together to make a dime, I still tend to spend less than what I could otherwise.

blitzdude

Stimulus checks. Keep em coming. Semper Fi!

spacehayduke

Every penny coming in and going out is subject to a strict budget, including numismatic items.

Best, SH

mirabela

The last six years it's been like a year-end thing for me -- after all expenses are paid and retirement contributions are contributed and money that should be saved has been saved and fun things we're planning have been allocated for and worthy causes have been donated to, I look at what it feels like I can spend without missing it, and I kind of square that against my wish list and present market conditions and then sometime between December and March I buy a coin or two.

Reckoned in those terms, this was a pretty tough year. I've got a kid heading off to college and another right behind her. Metals prices are strong, though, so I sold some junk odds and ends and used the proceeds to buy one nice coin for my collection for a net outlay of about $30.

Rarity

I am not sure I can define a budget on historical item such as 1800 dollar

fastfreddie

@Boosibri said:
What is a budget?

Telling the wife you bought a coin but got a great deal on it.

Boosibri

What is this “telling the wife” you speak of?

Cougar1978

My budget based on plan inventory number. If inventory below plan buy otherwise not. Keeps it simple.

My numismatic business has a plan cash and inventory balance. Too much inventory increases risk (many dealers inventory heavy during 89crash went bankrupt) and decreases liquidity. A strong cash balance keeps one in the drivers seat to pursue super buy opportunities.

At year end plan for cash (set-aside for the business) and plan inventory balances evaluated for increase / decrease. Factors against increasing inventory plan balance: slow retail sales, bear investment outlook - no material upward bid movement in sheet (CDN), external unfavorable events.

I am a big picture guy like to see everything on one page which can be printed out on 8.5 x 11” sheet. Usually a cover summary sheet analytical overview and then any detail sheets (can be printed out 8.5 x 11 which would include inventory, Sales Journal, Purchase Journal, etc.

winesteven

Cougar1978 - What????

ike126

Tough subject IMHO. I try to have a rough number in my head for the year but it rarely happens lol. If im over so what at least i have some nice stuff 😁

Kurisu

Same way I budget for my poker tournaments :-)
And that whole budget has been for coins this year :-)
1 rule, don't spend more than I can afford. Luckily my brain's wiring doesn't fight me on this.

Actually my mind-set changes a lot when I'm investing in a multi-thousand dollar coin as apposed to my fun hobby of collecting what I like and gambling numismatic-ally with some of my Mint Roll and vintage roll purchases... knock on wood, it's all been working out for me when it comes to coins.

I'll be buying some stuff in 2021 and doing lots of coin hunting too, but also 2021 has been a loooong time coming for me, decades even...I'm probably going to send about 20 to 30 coins to auction at Stacks this year but I also have quite the piles for grading at NGC and PCGS and the crossovers for some auctioning as well...

As I approach semi-retirement it actually looks like it's going to be another career alteration towards the world of numismatics full time, maybe on a professional level at some point...
Happy New Year everyone!!!

Zoins

I try to keep it limited and within what I'm comfortable with not needing to sell.

WAYNEAS

so since my wife has been "furloughed" due to Covid-19, she has no longer a need to buy new shoes for work. This allows me to buy what I want from her massive unused shoe budget. If she goes back to work, I could be in trouble.

blitzdude

@blitzdude said:
Stimulus checks. Keep em coming. Semper Fi!

Update, just checked my bank and already there it is $1200 pending (Jan 4th) deposit from the IRS. Hopefully momma lets me use her half to buy gold. Holy Moley, I better go check the debt clock. lol

winesteven

@WAYNEAS said:
so since my wife has been "furloughed" due to Covid-19, she has no longer a need to buy new shoes for work. This allows me to buy what I want from her massive unused shoe budget. If she goes back to work, I could be in trouble.

This reminds me of what happened to my neighbor. He told me his wife's credit card was stolen, but he chose not to report it. I asked him why, and he said the crook is spending less than his wife would spend!

neildrobertson

I have a number I came up with as a budget. It's set so that my coin spending remains affordable in terms of my monthly income and is still small in proportion to my overall savings. I want to avoid a situation where my coin "holdings" become a large percentage of my overall net worth since I don't expect them to increase in value over time.

I'm in the middle of a five year budget freeze I set to get all of those numbers in proper alignment.

P0CKETCHANGE

@neildrobertson said:

I want to avoid a situation where my coin "holdings" become a large percentage of my overall net worth since I don't expect them to increase in value over time.

Great point. It's something I think about and adjust for as well.

Snaps

I have a budget for coin purchases out of my earned income. I also try to find other items to sell so that I don't use my earned income budget or to supplement for higher dollar coin purchases. Here is a recent pile of coin money. That got me a 1934-D Buffalo nickel in MS65 for my short set.

DNADave

If you haven’t already done it, get out of debt first. Look at debt snowballing or sell everything and pay off debt. Get a second job if you have to.

I was totally debt free in 2009 and then messed it up in 2015 thinking I “deserved” a new truck.

I have about $3500 left on that truck and I’ll do my best not to make that mistake again.

With regard to the OP. I want to pay that truck off before I buy a single coin in 2021. Then I’ll look at about $250 a month budget for coins.

That’s the plan. Just have to stick to it.

divecchia

I have a budget that is based off of my weekly income. I am very disciplined and do very well staying within the budget. This is money I consider disposable income which means if my coins lose all value I don't care. To me it is like money spent on a vacation. You don't get it back once spent, but you enjoyed it very much while you were on vacation. When I pull out my coins and look at them (for me anyways) I feel like I'm on vacation.

Donato

Walkerfan

If it’s a real big ticket coin; I like to save up a little and then put the rest on credit and then pay it off in about six months. That’s usually how I operate.

silverpop

I have a set budget for coins which fits into the over budget for the household, nothing high priced just low to mid-ranged priced coins

rec78

I never had a budget. I lived from paycheck to paycheck and was coin poor for many years. I overspent on coins which I thought were a good deal for many years. For the 1901-s quarter I used a 6-month payment plan. And if need be I have money that I haven't borrowed yet.

jedm

Good question and you're getting a wide variety of answers. As for myself I don't really budget for coin purchases because it's a hobby to me and they are not expenses like taxes, or home and auto maintenance, food, clothing, transportation, insurance, or utilities. I also do not consider coin purchases as investments like real estate, business, an IRA or investment account. Coin purchases are, to me more like entertainment- buying coins is something I do in my free time and with my completely discretionary funds, very similar to spending for going out to eat, traveling, or gift giving.

NewEnglandNotes

Don't have a set "budget" so to speak.

I do have a decent job, and live well within my means, with no debt. No fancy cars, clothes or vacations for me, not looking to impress my neighbors or anyone else.

That allows for building a savings account as well as a decent chunk of unspent money in the checking account at the end of the month, and have no problem draining the checking account if the right piece comes up for sale or auction, or just let it build until something interests me. If something I want appears for sale and the price is off the wall, I have no problem walking away either. More times than not, it will show up down the road at auction or with another dealer for much less.