Yahoo Finance What is Causing Parents To Spend So Much More on Their Kids Than They Used To?
Having kids in Singapore can feel like playing the Sims. You have to invest in them by making sure the house is nice and offers enough light (and bathrooms) at all times, ensure they have enough to eat and see to it that their mood stays high with nice clothes to wear and the occasional birthday party.
While lower income families make do with what they can afford, many middle class and affluent families are ironically getting into debt over their kids. People may not be open about it, but the number of affluent young families I know who are rolling over their credit card balances these days is shocking. These are people who take their kids on holidays to Europe and the US during the June holidays and who seem to have it all. Here are some reasons affluent parents get into debt over their kids.
Too much tuition
Last year, Singaporean parents spent a whopping $1.1 billion on tuition. With that kind of money you would think they were hiring Angelina Jolie herself to mind their kids.
While the average Singaporean household spends $79.90 a month on tuition, of the 7 in10 parents whose kids have extra lessons outside of school, the median amount spent on secondary school tuition is a significant $260 a month.
In addition, half of the households who engage tutors spend more than $500 per month. With figures like that, it’s clear that many Singaporean households spend thousands of dollars a year just to have their kids attend lessons to repeat what they’re already being taught at school.
While Singaporean parents have been sending their kids for tuition for decades, the situation has gotten a lot worse. In the last 10 years alone, the average household spending on tuition has risen from $54.90 a month to $79.90. Very soon, tuition is going to get added into your TDSR calculation.
More importantly, if you ever went to Orchard Road in the afternoon in the late 90s and early 2000s, you would have seen large groups of students in school uniform hanging out at fast food joints, cinemas and games arcades. These days, you’re more likely to see tai tais dripping with designer wear milling about while their kids slog it out in tuition classes.
Signing up their kids for too many expensive extracurricular activities
Back in the 80s and 90s, many parents were satisfied if their kids didn’t come back with awful grades. The rest of the time, kids were free to do as they pleased, whether their activities of choice comprised pretending to be a monkey at the neighbourhood playground, or taking part in CCAs like soccer or badminton.
These days, I’ve noticed that lots of affluent young parents see their kids’ free time as a window of opportunity to mould them into a successful adult—and within the Singaporean definition, successful means rich, well-educated and with a high position in society.
As a result, many parents sign their kids up for expensive extracurriculars that they think gives them more social and cultural cachet. At a neighbourhood mall close to where I live, many kids attend lessons at a fencing academy on the top floor, never mind that fencing gear is not cheap and each lesson can cost over $100.
Buying them too many gadgets
If you remember what it was like to be a kid, you might recall the struggles you faced trying to convince your parents to buy toys. Back then, you might have spent weeks begging for a Ninja Turtles figurine which would have cost your parents all of $7.
These days, kids aren’t interested in cheap plastic figurines or pedestrian toys and games. Instead, they covet the gadgets that all their classmates are flaunting at school—smartphones, tablets and gaming consoles.
This is bad news for parents as new smartphones and tablets cost hundreds of dollars. Bet the parents of today are wishing their kids would just ask for Hot Wheels cars like children used to a decade or two ago.
Do you spend on any of the above for your kids? Tell us in the comments!
The post What is Causing Parents To Spend So Much More on Their Kids Than They Used To? appeared first on the MoneySmart blog.
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