The True Cost of Giving Kids a ‘Perfect Childhood’

The True Cost of Giving Kids a 'Perfect Childhood'

It’s natural to want to give your children the best — perhaps a top-notch education to give them a leg up later in life or some of the luxuries you didn’t have growing up. The problem is that these days, the ways we can indulge our children are virtually limitless. The spending frenzy begins quite literally in utero (hello, elective 3D ultrasounds for $150 a pop!), comes on fast and strong during the newborn phase (tricked out strollers for almost $900, professional photo shoots, over-the-top 1st birthday parties), begins to spiral out of control during adolescence (music lessons, sports gear, tutoring, brand new cars for 16th birthdays), and continues right on into young adulthood (college tuition to the tune of $50,000 a year, and then many new grads still end up living back at home for several years!).

When you add it all up, the cost of creating “the perfect childhood” is staggering. A recent survey by BabyCenter found that parents spend an average of $13,248 per child each year, including almost $1,400 on activities. Families with incomes of at least $100,000 spend about $2,600 more per child, for a total of nearly $16,000 per year. Meanwhile, 30 percent of parents surveyed said they are willing to stretch beyond their financial comfort zone to give kids “new things and experiences.” Worse yet, 46 percent have gone into debt to pay for children’s expenses and 1 in 3 are working longer hours to foot the bill.

“There’s a lot of anxiety around being a parent, especially a new parent, and marketers definitely know how to play into that, and they will use that to their advantage to sell you gear, toys, childcare and activities,” says Matt Becker, a financial planner who specializes in helping new parents. “Some of those things are genuinely helpful, but many are unnecessary.”

A few years ago, you at least had to leave your house to compare yourself to your neighbors. Now, thanks to social media, the pressure to “keep up with the Joneses” is ubiquitous — further fueling the cycle of overspending on children. In the BabyCenter survey, 22 percent of parents reported that they feel like their life is “not as fun” and 13 percent said they feel like their life is “not as good” as their friends on social media.

Your Facebook and Instagram feeds are a constant barrage of “Pinterest perfect” birthday parties, staged photo opps from envy-inducing family vacations, and snaps of smiling children engaged in all manner of enriching (and expensive!) extracurricular activities.

“When parents feel like they can’t afford to pay for that activity, birthday party or vacation that they envisioned, they feel like complete failures, even though the child may not even care about it,” says Andrea Woroch, a financial contributor to “I would say scale it back and realize most families aren’t doing this stuff, and if there is anyone [on social media] making you feel bad, there’s no reason you shouldn’t unfollow them and not feel bad about that.”

Extracurricular activities are a key area where well-meaning (and often high-achieving) parents tend to overspend as they groom their kids to get into “the right college.” That habit can be financially detrimental, and can take an emotional toll on the whole family as well.

“You feel like you need to sign them up for music, language, dance, sports, and then they are doing multiple different things at the same time,” Becker says. “That costs money and time, and can be stressful for you and for your children. If they are spread too thin, they might not actually enjoy any of the activities.”

Even if you technically can afford all of the activities, trips, designer clothes, cars and computers your children’s hearts may desire, you might be neglecting other financial priorities. For instance, Becker says saving enough for your own retirement is actually a tremendous gift for your children, who won’t have to worry about you in your golden years. Similarly, parents who have adequate savings and an emergency fund can provide more stability for their children, and are less likely to fight about money, which creates a more peaceful home life for everybody.

“It might even be things like traveling to see family, or being able to reduce your working hours or have a parent stay at home or being able to spend time with the kids on weekends — all of that might be more difficult if you are living above your means, or right at them,” Becker says.

Even affluent parents may want to think twice about indulging their child’s every whim. The newest version of the iPhone, those pricey designer jeans, or that all-expenses-paid spring break trip might delight your child in the moment, but Sara Pfaff, a financial advisor for UBS in Chicago, says the extravagance may be a disservice to kids in the long run.

“One thing that is the hardest for parents is equating wealth and happiness, but you want to raise children who define happiness outside of the parameters of wealth and money by focusing on the people in their life, the value of hard work and their accomplishments,” she says.

Even the “perfect childhood” must eventually come to an end — and kids who are accustomed to parents sparing no expense may find the adjustment to young adulthood (and meager starting salaries) particularly difficult. If they’ve never had any practice saving up for a big purchase or discerning between their wants and needs, it will be tough for them to start in their twenties.

“What we hope to raise are strong, confident, happy children, but we also have to raise solidly financially independent children,” Pfaff says. “Giving them a foundation in which every need is always met is not giving them that.

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