New research by Sainsbury’s Bank has found that this sort of spending is adding an extra £865 to annual household expenditure for parents.
In total, this is adding £6bn to expenditure across the UK.
Peer-pressured parental purchases include smartphones, fashionable clothing, parties, hobbies and tuition fees.
So why are parents getting peer-pressured?
According to Sainsbury’s Bank’s second Family Finance Report, ‘The Family Lifecycle – The Learner Years’, it is simply because other children have these desirable items or experiences.
Parents in London are feeling the squeeze to the greatest extent, with 70% feeling compelled to splash out for their kids.
In the South East, only 32% of parents feel peer pressured.
The main items fuelling this peer pressure are phones and tablets at 44%.
These are closely followed by clothing at 43% and school trips and excursions at 42%.
Other peer pressured expenditure include membership to clubs and societies at 30% and children’s parties or birthday gifts at 27%.
According to Simon Ranson, The Head of Banking at Sainsbury’s Bank:
“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.”
Melanie Wright, financial writer and mum of two said:
“’Pester power’ has prompted many a parent to give in to the demands of their children and buy them the items they want just to keep them quiet, but now parents are increasingly having to contend with ‘parent peer pressure’ too.
“It’s vital that you don’t get carried away trying to compete with everyone else, or you could soon find yourself in financial trouble.
“Focus on the things which are a priority for your child, rather than the things which all their friends are doing.
“And if you are feeling the pressure to throw them a big party when they reach those landmark ages of 16, 18 or 21, see if you can join forces with one of their friends who has a birthday around the same time so you can split the cost – and the workload – with another family.”
“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.”
Jasmine Birtles, founder of MoneyMagpie and author of the second Sainsbury’s Bank Family Finance Report, shared five top tips for parents:
Reason with the kids. Explain how much you can afford and, maybe, give them a choice between having the latest iPhone, for example, or something else they’ve been asking for.
Explain that they can only have one of them so put the ball in their court.
Go second hand. If they desperately want a new bike and you can’t afford it, look on sites like Gumtree and the police auction site Bumblebee Auctions. For tiny ones you might even find a free one by keeping an eye on your local Freecycle site.
Explain the difference between wants and needs. Say something like, “We all need food but you don’t need an Xbox, even if you really want it.” Your child may not get it at first, but eventually they’ll learn.
Be a role model. Show that you can delay gratification so that they learn from you. For example, when you’re shopping, say, “Wow! That’s a fantastic computer. I’m going to save up for it so that I can buy it soon.” Get other adults in the family to do the same so that it becomes the norm.
Turn their thoughts to giving, not having. Help your child pack up some of their old toys and clothes, and take them together to a local charity shop. Giving to others who are less fortunate than they are will help them to learn to appreciate all the things they own.
Do you have any tips to help others resist peer-pressure when spending money?