Pennsylvania News Today features a reflective piece on the good that can come from thinking about the purchases you make for your children. The author, Pete Marienthal, talks about his experience shopping for his kid’s extracurricular baseball activities.
Marienthal mentions that he paid $125 for a baseball bat for his kid. The bat was made of the best materials, what the author refers to as “NASA grade titanium”, and was light enough to wield easily, and well designed enough to give his kid a great grip.
As with many parents after they have spent on their children, Marienthal felt proud about what he’d done. His pride lasted only until the children’s coach told the parents during a pre-season meeting, that he would never pay more than $25 for a bat. He urged the parents to spend responsibly on the kit and equipment and the children needed. Boy, didn’t that change Marienthal’s views on his purchase! He quickly returned the bat and got a replacement bat, with higher quality, for a fifth of the price of the original bat.
You see, many parents equate spending a lot with spending right, and so, think that the more money they throw at their children’s extracurricular activities, the better parents they are. It’s the kind of thinking that makes retailers smile while making parents poorer, without really doing much for their children.
What makes this whole business worse is that many children flitter from one activity to the next. Your kid may be in love with baseball tomorrow and decide a month later that his true passion lies in ballet. This leads to a lot of useless spending on the part of parents. Let’s put this into context: 57% of Americans have less than $1000 in savings and 39% have no savings at all. A $125 bat is more than a 10th of what experts think the typical American should have as savings! To rub salt in the wound, Maarienthal points to a study that shows that parents with children below 18 years of age, may accumulate debt as a result of their child’s extracurricular activities. He further suggests that not only is this financially risky behaviour, it doesn’t bear any real benefits apart from making parents feel good!
Of course, the point about low savings rates suggests that any extracurricular activities will either be wholly or partially funded by debt. In the study on children’s extracurricular activities, parents reported spending $4000 per year on those activities. Your bill gets worse the more talented your child is. It costs money to fund a child competing at a high level. And the proportion of children who are able to leverage this into financial freedom is vanishingly small.
When I’m thinking about the fun places for kids, I often remember that it’s important to work within a budget. Ultimately, your child needs a financially free parent, not an indebted one. Parents have put themselves into a position where they feel obligated to spend big on extracurricular activities, even at the risk of their financial freedom. That kind of thinking needs to stop.