We Think Your Kids Suck! Here is Why.
Your kids suck money out of your wallet, your bank and investment accounts and your retirement. Let us tell you why this hurts your long-term financial plans.
We were at a BBQ in the mountains the other night. We hadn’t seen many of these people since last summer, some even longer ago. The house was beautiful with picturesque views of the mountains and trees. We grilled, had several versions of potato salad and more than our fair share of sweets. Our contribution was our poor man’s sangria and blue cheese and bacon potato salad.
It was fun to catch up, learn what’s new and what’s going on with everyone. Time with friends and family is always extra interesting for us because we are inspired with blog post ideas.
While we ate our main course, someone at our table told us that their eight year old granddaughter is in youth soccer for eight weeks at the cost of $2,000. Next year her other granddaughter will be old enough for soccer and cost the parent $4,000 for both kids. Our mouths dropped and we immediately looked at each other as if to say, “This is a blog post!”
We’ve commented before on the seemingly non-stop wheel of activities kids are put on these days. Until middle school, John participated in soccer in the fall and baseball in the spring. From middle school through college, he was in both summer and winter swimming. Due to religious reasons, David’s parents didn’t allow him to be in any after school activities.
From our recollection from the 70s, 80s and 90s, this was pretty standard. Some kids were in activities, some weren’t. Kids who were in activities were in one or two. There were exceptions, of course. Every school or town had “the star” athlete or performer who everyone knew would “make it” some day. In reality, they were the ones who had the best chance to become the few who made it. The rest of us just wanted to have fun and play. Our parents wanted us to learn basic life skills, such as competing, playing with others, sharing, winning and, yes, even losing.
The U.S. Department of Agriculture, for whatever reason, is the government agency that tracks the cost of raising a child from year to year. They’ve done this for decades. Their 2012 report, the most recent year for which the data are available, said that the cost to raise a child from 2012 and for the next 17 years would be about $241,080. Adjusted for inflation, that is a 3.5 percent increase from 2010 and a 23 percent increase from 1960. The only line items in America to increase more than the cost to raise a kid are college tuition, healthcare and CEO salaries.
Also Read: Is Dining Out Killing Your Budget?
Child care and education in 1960 was estimated to be about 2 percent of the cost to raise a kid, while in 2012 it was 18 percent. Other factors related to raising kids have increased, too, such as housing expenses because putting three kids in one bedroom a la The Brady Bunch style is grounds for a visit from Social Services.
We don’t have kids and aren’t in the position to tell others how to raise their kids. We are in finance and do know that most people aren’t prepared for college or retirement and many are overextended financially. We, also, know the value of a dollar. We are, also, not anti-kids. We are pro letting kids be kids and Mom and Dad avoiding the poor house.
As with every financial decision, parents should do a cost/benefit analysis. If your kid is interested in an activity or you want to introduce them to one, determine if it makes financial sense to let them participate. Ask yourself these three questions:
1. What will my kid get out of this activity?
2. How much will it cost to sign up?
3. What are all the peripheral costs, such as transportation, uniforms/costumes, private lessons, camps, etc.?
If your kid is interested in multiple activities, prioritize the list of activities. Determine which better suits your kid for an organized activity and which better suits your kid to play with the neighborhood kids in your backyard.
Some of John’s best memories are of playing stick ball at the dead-end of his street as a kid. A sawed off hockey stick and tennis ball were all the equipment necessary. With at least six kids, there was a game. Old Mrs. Nielsen didn’t appreciate it when home base was spray painted on her driveway entrance, but she got over it and the kids learned not to spray paint home base on Mrs. Nielsen’s driveway. Spray paint home base on The Fike’s driveway. It was gravel and home base could be kicked away when the game was over.
Should kids be in after school activities? Yes, if they want to be. There are definitely benefits. Should kids be on a non-stop wheel of activities indiscriminate of cost? No. Get out of the helicopter and let kids play outside without structure. Not only will this save Mom and Dad some money, even if the occasional window is busted, but it will teach kids to explore, be creative and learn life lessons that Mom, Dad, coaches or teachers can’t teach.
An unstructured pick-up game in the back yard with a partially deflated soccer ball can teach its own life lessons and save Mom and Dad money to help pay for college or to pay for their own retirement.