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Q: We are starting to look at our summer plans and what we will do this year instead of travelling with our kids. Not only are there coronavirus restrictions, but we can’t afford to keep using our line of credit when both of us are only earning about half of what we normally do. We have three children and their summer activities typically ring up quite a bill on top of our family plans. We feel bad saying no to our kids and asking them to consider cheaper alternatives, but we have no choice. It feels like kids have become so expensive; can we even save our summer? ~Kevin
A: If only someone had warned us that after the expensive diaper stage of having kids, it can only get worse! Daycare, recreation and technology quickly replace diaper costs, only to be followed by education expenses or helping them get out on their own. The cost of having children has gone up over the years, and some of that could be our own doing.
It starts innocently enough when we buy a pricey toy with all the bells and whistles, but our kids play with the box. We build a treehouse and set up a swing set and the kids prefer dirt and a hose. We up-size our home, move to a better area and gain access to better schools. When kids are little, money is not important to them and they look past the bells and whistles, but as they get older they become accustomed to the standard of living we choose to finance.
There is absolutely nothing wrong with giving our children the best life we can afford, and each family will make different choices around what that means. For some, fancy electronics, name-brand clothing, trendy summer camps or annual vacations become the norm; for others, family board-game nights, camping or hanging out with siblings and cousins at home is the norm.
There’s no right or wrong answer and a lot of families have a blended approach of slightly more expensive years versus more frugal years. This year, with measures thrust upon us to control the pandemic, a new approach might be inevitable. However, how we go about planning and turning our plan into reality might make all the difference.
How to talk to kids about changes to your spending
We have led our children to expect certain things, and when something happens to derail our plans to provide for the expectations we’ve fostered, it’s best to explain the changes matter-of-factly and in age-appropriate ways. When a household income drops by half, children will start to wonder what’s going on. Alleviate their uncertainties by helping them understand how the changes will affect them.
Reassure your children that their safety and security is still your priority. Then include them in the conversations about your plans, for the summer, for instance. Ask for their input, listen to their suggestions, and find ways to say “yes” rather than “no” to any reasonable ideas.
For older teens, this is also a great opportunity for them to learn about money. They could find ways to help finance some of what they want. You could even give them a budget and ask them to plan within it. This will help them distinguish between needs and wants very quickly. It will also encourage them to become creative and find ways to fulfil the wants that fall beyond the budget.
Teens are at a critical stage in their financial development. The habits they develop now will follow them into their young adult years. Most young adults are also in for a shock when they get out on their own for the first time and look to become self-sufficient; the comforts of home don’t follow them. By allowing your teens to participate in household planning now, you will help make the adjustment to self-sufficiency a little less stressful.
The overhead of having children
Most parents wonder at least once in a while if kids have become more expensive than when we were youngsters. Collectively, the answer is usually that yes, they have become more expensive. And it sometimes comes down to the overhead of having children. Expenses like daycare, before and after-school care, day camps, technology needs for school, high-speed internet at home, uniforms and equipment for sports and activities — the list seems never-ending, and it adds up fast.
However, our kids are only as expensive as we make them. Here are some things to keep in mind if you want to rein in the cost of your kids.
Some expenses are more flexible
Expenses such as clothing, transportation, recreation and technology are somewhat flexible in terms of how much they cost and there’s a broad range between needs and wants. These types of expenses are closely tied to a family’s lifestyle choices, which means this is where parents have a lot of control over how expensive we make our kids.
Fads and fashions
If there’s a new fad at school, do we buy in right away or wait a week or two to see how big a fad it really is? Maybe our child’s enthusiasm for the fad will fade.
Do we buy name-brand clothing, or do we strike a balance with some branded pieces and other more reasonably priced items? The pricier items can be birthday gifts or teens can contribute towards them with part-time income.
Sports and activities
When it comes to sports and activities, are your kids scheduled for a different activity every day of the week, or are they only registered in what they genuinely enjoy? Choose one team sport each season and look for ways to keep the cost of gear for growing kids reasonable.
For activities like music lessons, martial arts, theatre, gymnastics, swimming, tennis or arts and crafts, help your kids discover what they like to do before investing more heavily. Sign them up for short-term sessions or explore these activities together in your community without formal registration.
Transportation and technology
Are your kids used to the luxury taxi of mom and dad, or do they need to walk, ride their bike or take the bus sometimes? While it may be faster to drive them, looking after their own transportation builds valuable skills and independence while also weaning them off their luxury rides.
For teens who start driving, are you providing a first set of wheels that rivals yours, or is a modest vehicle that a student who works part-time can afford more realistic? If we don’t want to support our children from cradle to grave, it’s vital that we seize opportunities for them to build the skills they need to manage their own affairs successfully.
Technology and the ongoing parade of new and better devices and gadgets is an endless pit of money. Choose your battles wisely; there’s a fine line between ensuring that your children have what they need and keeping up with the Joneses.
Know which expenses are more fixed
Some costs come with fairly fixed price tags, and it’s worth finding a way to pay for these expenses. These types of expenses include glasses and eye care, dentists and orthodontists, reasonable education costs, and various health-care needs, e.g. medications, orthotics or physiotherapy.
If you have extended health benefits through work, that can help cover a portion of the expenses. To make costs more manageable, maybe you can pay for some expenses one year, but hold off on more until the following year. This could, however, limit what you can claim on your income taxes for eligible medical expenses due to the minimum threshold requirement. Some service providers offer flexible payment plans, which may be another way to pay for what is needed.
The bottom line on the priceless price of our children
Lifestyle choices, incidentally, apply to parents as well and it’s wise to practise what we preach. Kids pick up on the choices we make, but not necessarily the reasons behind them. Talk to your kids about why you make the spending choices you do and involve them when decisions affect them. This will give you an active role in the development of their values and attitudes towards money. And that’s an investment you can bank on!
Scott Hannah is president of the Credit Counselling Society, a non-profit organization. For more information about managing your money or debt, contact Scott by email , check nomoredebts.org or call 1-888-527-8999.
Copyright Postmedia Network Inc., 2020