Overspending on Kids? You Better Stop Before It's Too Late

We all love our kids, no question about that. But does that really mean we ignore all the things we’ve learned about money management and spend lavishly on them? Are we really doing them a favor and showering them with love by emptying our bank accounts for their sake? Is all this even worth it? Even though many of you may be guilty of overspending on your children, deep down in your heart, you may already be aware of the answer to the aforementioned questions. Money and kids is a sensitive issue, one that needs to be handled with extreme caution.

The situation doesn’t look too good

The job market hasn’t been too great lately as America’s still in the process of recovering from the worst economic conditions since the Great Depression. So, how much money do parents spend on children in the current scenario? Two words; a lot! As it turns out, parents are foregoing other expenditures to spend even more generously on their kids. This is true for both rich as well as middle-income parents. Still wondering why this is an issue worth addressing? Here is why:

  • total expenditure on kids have gone up from $185, 856 in 1960 to $226,920 in 2010
  • child care and education are taking up an increasing amount of budget, rising from 2% in 1960 to 17% by 2010

A significant percentage of women joining the workforce is believed to be among the contributing factors to the issue. What is even a more pressing concern is that by overspending on their kids, parents aren’t preparing well enough for their own as well as their kids’ future.

Is the overspending worth it?

So what if the parents are spending so much on their children? There’s nothing wrong with providing your young ones with the best, right? Wrong. Bitter as it may sound, the overspending has more to do with parental status than turning their offspring into high achievers. Sending children to private schools instead of public ones, signing them up for private enrichment courses, and opting for a nanny instead of daycare, all have significant economic consequences without little benefits to the child. Yet, more and more parents are making expensive choices.

Stop before you spoil them for life

Parents obviously know their kids better than anyone, but they often tend to get blinded by their misconceptions. You need to understand that you cannot buy your children happiness and help them grow into healthy and responsible adults by overspending on them. Your time is far more invaluable to them and their development than your money. Furthermore, spending too much on them can keep them from learning an important lesson of life, “money doesn’t grow on trees.” This may keep them from becoming money savvy, which in turn can create many problems for them during their adulthood.

You love your little ones and want to fill their world with happiness, but at what cost? Overspending doesn’t just take a toll on your own bank account, but may also sow the seeds for problems in your kids’ lives. Rest assured, they won’t love you any less for not overspending on them.

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