Parents: do you succumb to pressure to keep up with the Joneses?
New research by Sainsbury’s Bank has found that the pressure to buy the items for their kids because other children have them is adding £865 to the annual household bill.
Nearly eight in 10 parents (77%) with children under 18 spend on average £90 a month to send their children to clubs and on hobbies and 36% spend £143 giving them a helping hand with private tuition – a total of £233 per month.
This equates to a total of nearly £6bn being spent each year on such expenses.
The Family Finance Report found that of the 2,000 surveyed, the top three items fuelling ‘parent peer pressure’ are the need to have the latest technology, such as phones and tablets (44%); clothing (43%) and school trips and excursions (42%).
These are followed by membership to clubs and societies such as football club and scouts (30%) expensive children’s parties or birthday gifts (27%).
On a regional basis, parents in London feel the most peer pressure with 70% saying they feel it compared with just 32% in the South East.
Simon Ranson, head of banking at Sainsbury’s Bank, said: “The rising cost of everyday living and pressure to provide the latest ‘must have’ accessory is stretching family finances further than ever before. However, there is a fine line between providing our children with the very best and balancing the books, so it’s important parents shop around to get the best deals to make their money go further.”
Andrew Hagger of Moneycomms.co.uk added: “Incessant marketing of the latest ‘must have’ gadgets on TV, the internet and social media has helped fuel a ‘keeping up with the Joneses’ mind set which has rubbed off onto the younger generation. Trying to keep up to date with the latest phones, tablets and designer clothes can play havoc with family budgets so some financial education and a reality check is essential to stop people getting into debt due to non-essential or luxury purchases.
He said that children should be encouraged to understand the value of money at an early age as well as being taught some basic budgeting skills.
“To help children appreciate the value of money it is important to strike a balance so that the child contributes an agreed amount towards the cost of their new phone via their own earned income (pocket money/part time job). Appreciating the value of money and how long it takes to save for something is a life skill that will stand them in good stead for years to come.”