It’s shopping crunch time, and you’re determined to outspend and outdo the other parents on the block on presents for the kids.
What’s it going to be? Another must-have “Frozen” toy, or the umpteenth set of Legos?
If your motivation is to at least keep up with the Joneses by showering the kids with more toys, electronics, clothing and other stuff than they’ll ever need, it may be time to hit the brakes and re-examine your spending motivations.
Researchers at the digital coupon website CouponCodesPro.com recently explored parents’ attitudes on how they interact with their children, especially when it comes to spending. The company surveyed more than 3,600 American parents, all with children at least 1 year old.
One question parents were asked: Is there competition to outdo other parents?
The answer: yes, according to nearly 80 percent of the respondents.
Indeed, these parents will spend on average $532.87 per month to ensure their children will have more than their peers, according to the survey.
When asked whether they compare their child to other children, 72 percent said yes. And when asked what they were most likely to compare, behavior was the most frequent response. But material possessions were second, followed by education and appearance.
The survey then dug a little deeper and revealed other useful findings. The parents who indicated they try to outdo their peers were asked what they spend extra on. Here’s what the survey found: Parents splurge on expensive clothing, lavish parties, the latest toys and gadgets, extra tutoring for a better education, and beauty treatments.
Can they afford it? Though 52 percent said their job provided the income to cover the bills, 34 percent admitted they pulled out the charge card to ensure their children didn’t miss out.
Not surprisingly, this raised the cautionary flag.
It’s understandable that parents want their children “to be the very best that they can be,” said Nick Swan, the chief executive at CouponCodesPro. “To spend over $500 per month on a child, with some parents putting the cost on credit cards, though, just to ensure the kids are better privileged than their friends is a little extreme.”
No argument here. All this material buying also sends out messages about insecurity, jealousy and parental values — messages that many kids readily pick up on and mimic.
There’s another approach parents can take before hitting the mall, and it starts with budgeting.
The idea is to figure out how much discretionary income you’ll have to work with. For some people, that could mean not shopping until you’ve paid all your bills for the month or at least know what’s coming due, from the mortgage to groceries to the monthly cable bill.
At the same time, examine areas of your budget that may need adjustments. For example, many financial planners recommend that housing costs, including the mortgage payment, property taxes and insurance, be no more than 28 percent of your gross income. And all of your debts, including credit cards and auto loans, should be less than 36 percent. That’s called the 28/36 rule.
If you’re stretched, maybe the year-end bonus check should be applied toward making an extra principal-only payment on the mortgage instead of spending it on Star Wars action figures. Or cut back on the premium cable channels that drain dollars every month.
After paying the bills and making any necessary tweaks, what’s left is what you have to spend on extra stuff, such as presents for the kids.
If you do it this way and rein in some expenses, you could even wind up being able to spend more than the Joneses. In a more responsible manner, that is.