If you thought children’s birthday parties are little more than a couple of streamers, a few balloons and a cake, think again.
I just went to a 9-year-old’s party that put most weddings to shame, with a luxury venue, a deejay and dance floor, gourmet food, unlimited video-game play, a bowling alley, laser tag arena and a multi-person staff that kept everything moving with military precision.
Happy birthday, indeed.
“It is getting a little ridiculous,” said Rachel Cruze, co-author of the book “Smart Money Smart Kids.” “It has become a lot more about the parents than about the kids.”
While an over-the-top birthday will cost thousands of dollars, even a run-of-the-mill package at a chain restaurant can hit several hundred, or much more in some locales.
The bill is high even when children are too young to remember the event. According to a poll by website BabyCenter.com, 26 percent of parents report spending more than $500 for the first birthday party alone.
Think about the financial ripples. Multiply aN annual party by two, three or four children, and we are talking about a significant portion of after-tax income that could be earmarked for more important goals.
According to one survey by supermarket retailer Asda, the average parent in the United Kingdom spends an astonishing amount on a child’s birthdays through age 21.
Even half of that is a punishing bill. “That amount could cover 45 percent of your child’s first year at a private college, and probably much more, when you factor in investment growth,” said Atlanta-based financial planner Niv Persaud.
The big-bash trend has some parents saying that trying to outdo peers with the best party pics on social media is not worth the price tag.
Nonprofit director Jen Wohl of Brooklyn, New York, decided she just could not afford to keep up anymore. So her son’s last birthday party consisted of a gathering with friends in a public playground, some home-baked coffee cake and brownies, and a total bill of R686.
Her verdict: It was the best decision she ever made.
“I just thought, ‘What is it my kid really likes to do?’” she said. “I realized that a good football game with 10 of his friends would be way more fun for him than a big $2 000 party.”
Some tips for hosting an affordable birthday party for your precious little one:
Get creative
Kids adore sleepovers, which will let you skip the retail markups. Or you can gather in a public park with a few picnic tables and have a potluck, suggested Cruze, whose father is personal finance guru Dave Ramsey.
Brooklyn’s Wohl once asked local firefighters for a tour of the firehouse for 10 kids, to which they readily agreed. “Throwing money at something is actually the least creative thing you could do to celebrate your child,” she said.
Limit the numbers
One reason behind whopping birthday bills: Parents and children feel obligated to invite everyone in class, or to invite everyone who has ever invited them.
Succumbing to Chuck E. Cheese? Keep that celebration to 10 kids instead of 40, and save 75 percent.
Make it an occasional splurge
A big birthday party once in a while can be fun, but it does not have to be every single year.
“One of the things I have practiced personally is to only have one child have a ‘big birthday’ each year,” said Chris Hardy, a financial planner in Suwanee, Georgia. “I have three kids, and they rotate which year is the big year for their party.”
For bigger milestones like bar mitzvahs or sweet 16s, for instance, feel free to loosen the purse strings. Otherwise, keep it cheaper and low-key.
Use it as a teachable (and charitable) moment
Children learn from every financial decision you make, whether you realize it or not. One way to make it count is to do something like turn a birthday into a fundraiser.
Charity: Water, a nonprofit organisation working to bring people clean drinking water, said its average birthday campaign raised $770.
Says Cruze: “If you can encourage that spirit of giving, that is an amazing thing.”
REUTERS