Million Dollar Kids – Give me a break
Sorry for another rant, but I’ve been spending a little more time at yahoo lately and have been actually reading their finance articles and it’s amazing how far from reality some of these articles are. Ok maybe they aren’t crazy because they can find lots of people to interview for them that back their articles up, but they are are far from reality for people who have common sense.
This latest article, talks about the cost of raising kids. I’ve always been one to think that the figures out there for the costs of raising kids were completely out of whack. Yes you can spend that much (if you try), but just like anything (cars, house, landscaping), if you are smart about it you can probably get better results with spending a fraction of the the money.
Maybe I’m the weird guy, but does any of these quotes from the article stand out as completely crazy?
We placed all these expenses on a spectrum, from those that parents and experts say are the most common, up to more unusual — and costly — frills. At the lowest end, our estimates came in at about $800,000 (in 2007 dollars) through the age of 17. Add in extras like private school, a nanny and a flat-screen TV set in a kid’s bedroom, and that figure climbs to $1.6 million.
Granted this article studied the top 3rd of the income ladder, but I bet a vast majority of people reading this article now think they are doing pretty good on child expenses and when the next spending opportunity comes they might crank it up a little to keep up with the Joneses. First off I’m going to question the intelligence of having a TV i your kid’s bedroom, second I’m going to berate you for giving the kid a plasma TV. Like I said if you want to you can probably spend $800,000 or $1.6 million on your kid, but this in no way justifies those estimates as it costs $1.6 million to raise a kid. It’s costs $1.6 million if you are pretty wealthy and you spoil your kid. I’m pretty sure as wealthy as Warren Buffett is he didn’t spoil his kids with luxuries and I’m pretty sure they are better off for it. What is it with today’s society that thinks that they have to give kids everything that they want or they’ll grow up to hate their parents. Instead they get everything they ever want, without earning it, and have no idea to deal with the real world.
In San Diego, Jacqueline Jones recently rang in her fifth year with a $1,000 mermaid-theme party. The fete, held at a community pool, included a pinata, pizza, cake, juice boxes, customized goodie bags for 20 and a former beauty queen who arrived dressed head to toe as Ariel, the Disney princess.
$1,000 on a five year olds party. She goes on to say “it’s worth it. A lot of my friends said I’m crazy, but I mean, it’s for a memory she’ll have forever.”. Obviously that statement justifies it. I don’t know how much the beauty queen cost, but $1,000 is a little extreme for me. Your daughter is 5 years old, if you can’t come up with a party idea for a couple hundred dollars that she will remember for the rest of her life then you obviously have already set her expectations too high. Of the five year olds I know it doesn’t take too much to make their day and from my experience five year olds have a pretty good time together just playing, I couldn’t imagine a five year old coming home from a party thinking it was lame because he didn’t get something. Again you are creating your own nightmare when you set kids expectations like this.
Likewise, academic extras are becoming routine; the average income of a family seeking tutoring for a child is between $50,000 and $75,000, according to Eduventures, a Boston-based market-research firm.
I’m all for education. I think it’s one of the most valuable things you can give your child or yourself. That being said I think private tutoring, especially for a young kid,
that costs $50k-$70k again is going a little overboard (oops that’s the problem with rants you get on a roll and misinterpret details 🙁 ). I”m all for pushing your kid to be all they can be, but they also need to have a child hood and I think that the best thing your kid can learn is to learn on their own. They don’t need a high priced tutor teaching them French. If they can go to the library and read a book and learn on their own it’s going to do a lot better for them than some high priced tutor meeting with them every day. If the tutor is because your kid is struggling I’m pretty sure his current teachers would be willing to spend extra time with your kid before and after school for free and you can probably find a retired teacher who would be glad to help out for a very reasonable rate.
I don’t know if I really believe how effective early in life tutoring really is. Great your kids 7 years old, knows 3 languages, and can do calculus. How does that benefit them in life. Either they will find it hard to relate with their current students or you rob them of a child hood and move them ahead grades. As important as education is to be successful, you don’t need that much extra education when they are young children. I have no idea on this but if you look at famous successful people I bet a huge majority of them didn’t have too much extra tutoring when they were young children.
In many homes, a central issue is how to provide every advantage without overscheduling and spoiling.
Irene Smith, an attorney and property manager in San Jose, Calif., has mentally established parameters for her 7-year-old daughter, Amelia: only two classes a week. But Ms. Smith has also decided the most important thing for Amelia’s future success is fluency in Spanish. To that end, Ms. Smith transferred Amelia from public school to a $13,500-a-year private academy where Spanish is taught daily. She also signed her up for a $900 weekly class with Berlitz, hired a private tutor, and has taken Amelia out of school for up to two months at a time to travel to Costa Rica and Mexico to perfect her foreign-language skills.
Again what are you really doing for your child. Yes it’s important that she learns Spanish, but learning it at 7 versus learning it at 14 really is not going to benefit her that much. The earliest she will ever need to use it is when she is 22 so I think starting in 8th grade or high school will give her ample time to learn and guess what it won’t cost you $900 /week and you don’t need to take your kid out of school. Great your kid knows Spanish better than half the spanish speaking people in this world, but you took them out of school for 2 months to aid in her Spanish education. Priorities a little skewed? Yeah Spanish is important, but so is English, Math, Social Studies, History, and interaction with her classmates
Parents with more than one kid then face the fiscal phenomenon of upgrading, where baby No. 1 starts with a standard-issue stroller, the middle issue gets an upgrade to a $300 MacLaren and, by the time No. 3 comes around, it is an $879 model by Bugaboo.
Unless you are purchasing a running stroller because you actually are a runner, I can’t imagine spending more than $100 on a stroller. In fact I know we got one of our strollers for $5, and the other one was under $50. What advantage can a $879 stroller possibly get you?
A one-week domestic trip totals about $1,830, according to AAA. But take your kids to Disney World, and that figure jumps to at least $5,000 — double that for a trip to Europe.
I’ve been to Disney World quite a few times in my life. We live in Wisconsin, it didn’t cost $5,000 to do it, not even close. Again be smart. Yes if you call up Disney World and get a huge suite right in the middle of the magic kingdom where Mickey is your personal butler sure. However if you plan your vacation smart and look for deals and pay for the important things it probably would be a fraction of the price. I’m going to take a wild stab in the dark, but I’m going to bet that Nickel didn’t spend $5,000 for his 8 trips to Disney World.
Again you certainly can spend $1.6 million dollars on each kid. In fact I bet you could spend more. Just tell your kids they can get whatever they want and make sure they have high standards. If however you want to raise well grounded kids who will be able to succeed in life maybe you should think more about teaching them what is truly important in life and instead of teaching them Spanish at age 7, how about teaching them the value of a dollar and earning what they get in life. Trust me your kids will probably love you more going this route than buying them $900 strollers and thousand dollar birthday parties.