Parenting Mistake #3 :: Keeping Up With The Joneses’ Kids

Yahoo has an article discussing how overspending on kids can risk your financial future.

In that article they discuss four common mistakes that parents make with regard to spending on their own kids to the detriment of their own financial well-being.

Over the next few days, I am going to list each one of these mistakes and provide you with my thoughts and comments on each of these mistakes.

Parenting Mistake #3 :: Keeping Up With The Joneses’ Kids

“Throughout the suburbs of America, there is a fierce competition for who can throw the most lavish birthday parties for their children,” says Scoggins. “Renting ponies, carnival rides, etc., is a common scene. Setting the bar so high can destroy a child’s appreciation of the fact that some of the best things in life are free and set him up for a lifetime of needing a high-cost lifestyle in order to be happy.”

I’ve read numerous stories about parents that have spent thousands of dollars on a birthday party for a small child or parents that seem to buy every new toy for their child.

In our family, birthdays have always been a very low-key affair with one party for our kids and their friends and then one party for all of the extended family. The friend birthday party typically involves a few friends being invited over for some pizza and ice cream with a handful of games and activities.

Last year we took our oldest son and a few of his friends to a local LEGO store for his birthday party. This wasn’t very expensive at all but was a change of pace from our typical birthday celebrations. But even with as much fun as the kids had there, they still talk more about the birthday party where we rented a few movies and everyone came over in their pajamas and we had a *movie night* birthday party. It was kind of like a sleep-over but we had the benefit of sending all of the other kids home at the end of the night.

Our kids go through phases where they ask for every toy they see at the store but overall they are very aware of how we live on a budget and do not spend money on everything we want. While I think we are lucky that we have two children that really appreciate free and low-cost activities, I do believe that there is more than luck involved as they learn this behavior from my wife and me as we try to lead by example and explain everything to them.

Throughout my life I have known many people that buy things just because someone else has them or has to be the first people to own the latest gadget before anyone else. The unfortunate thing is that many of these people do this at the expense of their long-term financial security.

Is that thousand-dollar birthday party for your 3 year-old really worth having to work longer before retirement? Do you try to keep up with the Joneses’ or are you someone that sets your own trend of frugality?