T. Rowe Price Survey Says We Spend Big Bucks On Birthdays
02 Apr 2016
T. Rowe Price’s 2016 Parents, Kids & Money Survey sampled 1,086 parents of 8 to 14 year olds and their children to understand the basic financial knowledge, attitudes, and behaviors of both the parents and children. In general, the survey said that parents put their kids first and are willing to pull from retirement or go into debt in order to spend money on their kids for both unnecessary and necessary items. The survey also showed a reluctance or discomfort on the part of parents to discuss money with their children.
From the 2 charts below, 41% of parents spent $200 or more on birthday presents as well as 41% of parents spent $200 or more on birthday parties.
Spend Only What You Can Afford
You really should not have to dip into retirement savings nor go into debt over birthday parties and presents. You have the whole year to plan so it is best to set a budget at the start of the year on birthday spending and then stick to it. Since you have made your budget at the beginning of the year, you can take your time and purchase decorations and paper goods throughout the year when they go on sale or depending on availability at the dollar store. The $ amount is not as important as the fact that you should spend only within your means. If you do have the money to splurge a bit, then by all means go ahead. But if you are like most of us and have limited funds, then budgeting and planning make all the difference.
Involve Your Child In Birthday Budget Conversations
If you involve your child in the birthday gift spending discussions, then he or she will not have outrageous expectations. Let your child know ahead of time how much you can spend and ask them for some ideas for gifts. If they have their heart set on a more expensive gift, then suggest that they can contribute their allowance money or other savings. It is also a great idea to get your child involved in the birthday party budget and planning at this age range of 8 to 14 years old. It is the perfect time to teach financial awareness and responsibility. Not only will it prepare your child for money issues later in life, but it will also give them a sense of pride and ownership in the birthday party. The celebration will be all the more special since your child played such an integral role in the planning.