But this isn't simply a matter of well-paid Gen-Xers buying too many goodies. The details vary, but across the middle class and upper middle class spectrum the refrain is similar: "It sucks you in slowly but surely," says Afsaneh Djabbari-Aslani, a mother of three in New Canaan, Conn. "Your friend is calling saying they're signing up their daughter for nature center, so can you sign up too, because their kid doesn't want to do it if my kid doesn't want to do it . . . Then, if your child is the only one not doing travel soccer, she'll be left out. So you're not paying $50 for rec soccer anymore. You're paying $600 dollars for travel soccer . . . It just continues in that sense, that you keep thinking you don't want to do it, and you end up doing it."
Djabbari-Aslani isn't a spendaholic. She finds it ridiculous that her tween daughter has friends who carry iPhones. She has no plans to buy one for anyone — including herself. But "I finally gave in and got a cell phone for my thirteen-year-old," she says, "because she was the only one without one." If you've got two or three adolescent kids with their own phones, iPods and a basic video game setup, "the average spending per kid is probably hundreds of dollars a year," says Rick King, a father of four living just outside Manhattan in Montclair, N.J. Those kids need computers for schoolwork and socializing, plus the games, movies and downloads that these suddenly vital gadgets require.
And there's one aspect of this overspending trend nobody talks about, an aspect marketers hope no one brings up: For all the excess, nobody's having spectacular fun. Worse, no one is confident that this crippling spending is cranking out a generation of well-adjusted, fabulously fit, sparklingly sociable little geniuses, either.
Five Things You Can Do Today to Improve Your Financial Health
1. Knowledge is power, so track your spending.
Make note of every dollar you spend today and continue tracking your spending for the next thirty days. Include everything from the smallest cash outlay to the largest bill payment, and keep in mind automatic charges to credit cards. Once you've got an accurate picture of where your money goes, draw up a monthly budget — preferably one that includes contribution to savings. Programs like Quicken can be useful for helping you keep track, but entering expenses in a Word document or writing them on a legal pad will also do. Just choose a method you'll stick with faithfully.
2. Forced savings is your friend.
Forced savings was made for the discipline-challenged: Money is deducted from your paycheck and socked away before you can spend it. If your company offers 401k, enroll, says Nashville-based financial planner Troy Von Haefen. And if you're a small business owner, learn about solo 401ks and SEPs. Those already enrolled in a plan can seek advice on contributing the right amount each month. (If you're getting a large income tax return, Von Haefen says, you may be better off lowering your federal withholding and raising your 401k contribution. Paychecks remain the same, but you'll save more tax-free.) In addition to 401k, you can set up additional forced savings by having a company like Vanguard move a set amount of money each payday from your checking account into an investment account.
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Usually dangerous addictions at least offer a satisfying high, but this one brings little more than a fleeting buzz for our bucks. We're paying for smack but getting whippets.
Parents all over the country recite strikingly similar lists of things that eat up money without delivering much more than the sense that obligations are being met. And they're getting sick of it. The list is topped by the ridiculous birthday bashes we've witnessed for several years now. A slew of articles on the subject start off the same way: "Parent X spared no expense celebrating the birthday of their child. (Fill in name of costumed character) was there, and there was even a (fill in type of farm animal) on hand to celebrate little (fill in pretentious name)'s big day." Next comes a quote from the parent, saying "I know it's crazy, but it's just so much fun!"
Lately, parents sound decidedly less amused. They say they did this stuff in their first child's early years because they were so psyched to be parents. But it's now a freight train they'd love to disembark. "I've spent over $500 at least once on a birthday party and felt sick about it afterwards," says Scott Dauenhauer, a California father of two. "I had the money, but what kind of example is that?" Dauenhauer, by the way, runs a wealth-management company.
Many parents sound as mildly hung over as Dauenhauer. Next time you attend one of these parties, look around — how many kids look significantly more jazzed to be there than they'd be if you, say, offered them a bag of Skittles? And how many parents look ready to stab themselves in the head with a plastic cake fork?
©2008 Melissa Rayworth and Nerve Media
About the Author
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Melissa Rayworth writes about American culture, sexual politics and parenting for The Associated Press and other national news outlets. She lives in Pittsburgh with her husband and two sons, making frequent trips to New York City for work and play. |
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