Are You Spending Too Much Money on Your Kids?

Parenting can be expensive, but it doesn’t have to leave you broke.

There’s no way around it: Having kids is expensive. But just because parenting changes the way you handle money doesn’t mean it should leave you broke. So how do you know if you’re spending too much money on you kids?

I have learned a lot about parenting since my daughter was born in 2014 (and my son came along two years later). I’ve also learned that the financial temptations and pressures I faced before parenthood became even more intense with kids in the picture.

We all want to provide well for our families. But buying kids too much can be hazardous to you and to them. Here are five signs you’re spending too much money on your kids.

1) You buy them the best of everything.

It’s completely natural to want good things for your kids, or even to want the best things for them. But the marketplace has taken this desire to extremes.

Companies market a host of high-end luxury items to new parents. Whether it’s expensive diapers, designer baby clothes, over-the-top strollers or high-priced toys, these items take advantage of your instinct to provide well for your children.

If you fall into the habit of buying the best of everything, you’re going to end up spending too much money on your kids throughout their lives. Focus instead on buying things they will enjoy at reasonable prices.

2) You go overboard with health and safety.

Keeping your kids healthy and safe is important. But how far will you go, and how much more will go go, for the perception of additional safety?

From organic foods to high-end automobiles, you’ll find lots of products that seem safer and healthier than lower-priced alternatives. But are they really?

The truth is that nearly every children’s product today has to pass government-regulated health or safety inspections before reaching consumers. When you pay more for a super-safe product, that product might have performed slightly better in safety tests than its low-priced alternative. But is it smart to pay double the price for something that is only marginally better?

3) You’re keeping up with the little Jonses.

Trying to keep pace with your friends and neighbors is one of the biggest mistakes people make in their finances. And when you have kids you may find yourself struggling to keep up with the appearances of their little friends.

You don’t want your children to feel jealous of their friends’ toys and clothes. But will they really notice? You don’t want other parents to judge you for buying cheap stuff. But why do you care what they think?

Try to keep up with the little Jonses and you’ll likely find yourself spending too much money on your kids. It might feel good now, but it will only hurt your family financially in the long run.

4) You have trouble saying no.

If you’re a parent, you should be the person setting the financial agenda in your house. But if you find yourself constantly caving to the demands of kids, you may not really be in control.

Kids don’t understand money. They don’t know the difference between what is cheap and what is expensive. And they have no regard for your budget. So from time to time, they’re going to ask for things that you really can’t afford to buy them.

If you don’t learn to say no, you might make them happy in the short term. But in the long-term, you’re modeling compulsive behavior and irresponsible spending. That’s a pattern that they’re going to pick up on and repeat later on in their own lives.

Giving in to your kids’ demands for stuff hurts you now. And it may hurt them in the future.

5) You’re neglecting your own needs.

Most parents sacrifice for the benefit of their children. That’s a noble thing to do. But you have to be careful about how often you do that.

If you make a habit of neglecting your own financial needs, it’s going to catch up with you sooner or later.

Caring for your kids shouldn’t stop you from giving to others, saving for emergencies or investing for the future. And you also need to make sure you have enough money to take care of home and auto maintenance, buy health and life insurance and fund other important purchases.

If you forego life’s essentials for too long, you might eventually run into serious financial trouble. And the last thing you want is for your grown kids to forego their essentials to take care of you.