I have to applaud Kerri and Mike Miller for one reason. They were willing to share their financial problems with the readers of Money Magazine and CNN Money, despite the level of embarassment that kind of publicity might create.
While the article spotlighting the couple did not say explicitly whether the Millers are spending more than they earn, their level of debt is climbing higher each month. It’s clear they’d like to cut back their expenses, a big portion of which is caused by the desires of their children.
Thanks to bombardment of commercials and peer pressure, kids have strong desires for nice clothing and cool toys. It’s not really these desires that cause the spending, it’s the fulfillment of those wishes. How bad is it?
There’s 12-year-old Kate, a seventh-grader who covets a pair of $160 boots, prefers clothes from American Eagle rather than Target and recently got a $300 cell phone.
There’s nine-year-old Landon, who has a voracious appetite for video games. And their youngest, four-year-old Claire, will soon start taking ski lessons (cost: $224, not including equipment).
All three kids attend summer camps that run about $60 a day for each child. And then there’s the cost of babysitting ($200 a month), preschool ($4,000 a year) and braces ($3,000).
All the items mentioned above are not life necessities. These kids could easily survive without these luxuries, and at the very least, there are less expensive choices for everything. The only things listed above that I would disagree with in almost all circumstances are the ski lessons for the four-year-old.
The article contains a number of suggestions for the Millers, and presumably for the millions of families who find it hard to make ends meet while fulfilling their children’s desires. Start with saying no to the kids. When your son or daughter expresses a wish for a $300 cell phone, it should be an obvious candidate for an inflexible negative response. There is simply no reason for it — unless the kid is running a business where he needs instant access to clients through voice and email.
* Examine your motives. Are you throwing a blow-out birthday party because it’s what the kid wants or because you want to show off to the neighbors and the parents of the kid’s friends?
* Stop the whining. Saying no is difficult, but the kids may take rejection better if they are given an inside look at the household financial operations. If you can help them get a sense of your inflexible expenses, perhaps they can sympathize.
* Teach money management. Give the kids control of their budget, so they can learn to make the best financial choices. Let them make mistakes and learn.
* Save on the must-haves. Negotiate wherever possible and don’t immerse a kid with high quality activity equipment until they’ve been participating for several years. Hobbies and interests at a young age are fickle.
* Nip surprises in the bud. Stay on top of your finances to catch things like a stratospheric cell phone bill due to excessive text messages.
Kids will be kids. You won’t be able to control every aspect of your children’s lives. Even with your best protection, they will be exposed to a world of materialism. They should be familiar with this world — it is the world they will live in their entire lives. I don’t believe children should be forced to act too mature for their age, but as they grow older, you should help them be aware of different forces in the world that try to share their thoughts and desires.
Help! Our kids are driving us broke [CNN Money]