There is no greater joy in life than children, but if you don’t already know, it will not take you long to figure out just how expensive children can be. When they are born it is all about keeping them healthy and giving them everything that they need to stay that way. But as they get older and develop a mind of their own, they begin to want things.
Not only do they want things, it sometimes begins to be about what all their friends have and their friend’s lifestyle may not fit your budget. Even though we all want to give our kids everything that we can, it may not be in your best financial interest to give your kids everything that they want. You should not be financing your lifestyle or your child’s lifestyle on credit cards.
One of the best things you can do for your child is to teach them financial responsibility and contribute to a fund for their college education. If you start shortly after birth saving for college, you will have a good start by the time your child is ready to begin attending the school of their choice. Even a small amount will help.
Not everyone can afford to save for an education and very few people can afford to finance an Ivy League education. At the end of the day a college degree is a college degree as long as it is from an accredited school. Rarely, will a $100K education benefit you considerable more than a $40K education. I don’t think a parent should have to take out loans to pay for a child’s education.
The other thing that parents deal with is what kids want. My son has everything he needs and many things that he does not need. He does not ask for extravagant things, although he will occasionally ask for things. If it is in the budget and seems like a wise purchase, we will normally make the purchase. I have tried to educate him on the smart way of handling his money and how to avoid making some of the mistakes that we made. Proper credit card debt management is extremely important.
Financing extravagant parties or making expensive purchases for children can do more harm than good. If it is in your budget to do these things, there is not a whole wrong with it as long as your child understands the value of money. If your child will always have access to that kind of money, it is different than the child that has to learn to live on their own.
No matter how much money have and are willing to give to your child, it still important for them to realize the value of the money they are spending. You may not think that $5,000 sounds like a lot of money, but if you look at it in terms of how long you have to work to take home that amount of money, you may feeling differently about it in the end.
My son’s latest request is to have the basement finished, so he and his future wife can live in it after they get married (only for a few months). Even though I do not have the money now, I think I can save it in time for the renovation to be complete before the wedding. My goal is to spend only $10K on this project. If it were my decision, I don’t think I would finish the basement. But as long as we do not go overboard, I think we can increase the value our home by what we put into it and that makes the project okay with me.