Is your household budget tested raising kids in this modern era?
This post seeks to reveal the true cost of raising kids in the current environment.
KIDS’ soccer training, tennis camps, music lessons, drama, maths tutoring – the list is endless and they all cost!
Even when a household is trying to scrimp and save, most parents still find a way to shell out thousands of dollars for activities they believe their children can’t miss out on.
But is it money well spent?
Research reveals that many households are forsaking financial security and family well-being by taking out loans and running up credit card debt to pay for the schedules of their overbooked offspring.
And it’s no coincidence that the cost of most kids’ activities are marching up faster than inflation.
More and more businesses are tapping into the spending power of the child, and psyche-savvy advertisers know how to ignite the feeling of bad parenting.
Not surprisingly mums and dads would rather cut back on their own necessities than stop paying for their children’s increasingly expensive activities – an indication supporting a headline: “Family budget tested raising kids” in a recent news report.
In the UK, a recent survey found that the cost of sporting and cultural activities for children has risen by 67 per cent over the past decade, double the rate of inflation in the same period.
While the figures may not be as extreme in Australia, sending a child to tennis coaching, for example, cost about $220 a term three years ago compared to $300 today – almost a 20 per cent increase. Piano lessons cost $60 an hour, almost double what it cost back in 2007.
Parents complicit in household budget testing
Financial planners confirm that parents invariably resist cutting back on kids activities to tighten family budgets.
“It’s a well-known business fact that when it comes to things that affect us emotionally, we’re usually prepared to pay a hefty premium for goods and services. And there is nothing that hits our emotions harder than parent guilt,” Justine Davies, a Financial Planner, says.
Ms Davies advises parents to look for activities that are free or subsidised.
“Local councils offer lots of fantastic free activities for children such as art and craft classes and there are always museum and galleries to visit .
“For older children, sporting organisations often sponsor local club activities, which can make things much cheaper.”
Psychologists point out that over-scheduling a child can not only strain the household budget but family health as well.
A recent Let’s Play survey found that 47 per cent of Australian parents are experiencing “family fatigue” from running children around to activities.
And while learning to play a musical instrument may bring a child lifelong success, don’t count on it turning them into a genius.
Dr Andree Brooks, psychologist and author of Children of Fast-Track Parents says exposing children to many extracurricular activities can hinder their mental health.
“In our efforts to produce Renaissance children who are competitive in all areas, we squelch creativity and their learning ability,” Dr Brooks says.
“Some children are simply not able to function well with so many responsibilities and can develop stress disorders.”
Other child experts echo Dr Brook’s concerns.
Dr Alvin Rosenfeld, a psychiatrist and author of The Over-Scheduled Child, says enrolling children in too many activities is a western world problem.
“Over-scheduling our children is not only a widespread phenomenon, it’s how we parent today,” he says.
“Parents feel remiss that they’re not being good parents if their kids aren’t in all kinds of activities. But they are putting their children under extreme pressure to achieve and be competitive.”
Is your household budget tested raising kids?
The team at Continuum Financial Planners Pty Ltd can guide you in planning for the relevant financial costs – and working to a family budget: to see how we can be of value to your wealth management in this regard, contact our office, either by calling 07-3421 3456; or completing our website Contact Us form.
In the meantime, you may like to refer to our annual Economic and Markets Outlook: one earlier edition, Economic Outlook 2009 helps set the scene for how we prepare annually for investment strategy decisions for the coming year. (Other years have carried titles such as Market Outlook 2016, or Economic and Markets Outlook 2023.)
