In a Nutshell
Many parents take on short- or long-term debt for their children. Some debt is for essential purchases. But according to a new Credit Karma survey, most parents — 53% — also borrowed money to pay for nonessential items or experiences for their kids. The reason? Over half of parents said they want their children to have a better life than they did.Children come first, of course.
So it may come as no surprise that parents are willing to borrow money to make sure their children have clothing, food, a place to live and school supplies. After all, these are essential expenses.
However, a recent Credit Karma/Qualtrics survey of 1,000 parents in the U.S. found that 53% of respondents had also spent money they didn’t have — borrowing money, using credit cards or taking out loans — to pay for nonessential items or experiences for their kids. (Learn about our methodology.)
Parents from the survey also reported feeling pressure from outside forces — such as fear of being judged and fear of their children being judged — to overspend on their children. Some even said they typically keep their child-related debt a secret from their kids and partners.
Key survey findings
| More than half (53%) of parents have gone into debt to buy nonessential items or experiences for their children. |
| The majority of parents (67%) have spent money they didn’t have to buy their children essential items or experiences, which parents said included items such as food, shoes, clothes and school supplies. |
| Over half of parents (52%) said they overspend because they want their children to have a better life than they did, and 40% of parents saw their excessive spending as an investment in their child’s future. |
| About 3 out of 5 (61%) parents have felt pressure to spend money they didn’t have to buy nonessentials for their children. And 27% of parents said they’ve overspent because they were either afraid of being judged by friends or other parents (11%), or because they didn’t want their kids judged by their peers (16%). |
| One-quarter of parents (25%) said seeing other parents doing something on social media makes them more likely to spend money on the same activity. |
| Most parents don’t tell their children or other parents about overspending on their children, and almost a third (32%) don’t tell their partner when they go into debt to buy something for their children. |
When it comes to their kids, what do parents consider nonessential vs. essential?
Parents from the survey frequently selected the following as nonessential items or experiences for their kids:
| Item or experience | % of respondents who said it was nonessential |
| 1. Designer clothes | 87% |
| 2. Concerts, musicals or theater | 75% |
| 3. Organic food | 73% |
| 4. Study abroad | 71% |
| 5. Private school | 70% |
| 6. Summer camps | 69% |
| 7. Cosmetic care | 65% |
| 8. Personal laptop | 64% |
| 9. Pets | 61% |
| 10. Cellphone | 57% |
Parents from the survey frequently selected the following as essential items or experiences for their kids:
| Item or experience | % of respondents who said it was essential |
| 1. Food | 94% |
| 2. Shoes | 92% |
| 3. Clothes | 91% |
| 4. School supplies | 91% |
| 5. Bed | 91% |
| 6. Medical services | 90% |
| 7. House | 88% |
| 8. Back-to-school shopping | 83% |
| 9. Birthday presents for their child | 78% |
| 10. College tuition | 75% |
How much are parents spending on nonessentials for their kids?
Most parents (69%) said they had made between one and five nonessential purchases for their children in the past year with a loan or credit card.
The total cost for those purchases varied widely.
Nearly half of respondents (47%) had spent more than $500 annually on nonessential items or experiences for their kids. And a little over a quarter of parents spent more than $1,000 in a year.
| Average annual spending on nonessential experiences or items for children | % of respondents |
| Less than $100 | 11% |
| $100 – $200 | 17% |
| $201 – $500 | 25% |
| $501 – $1,000 | 22% |
| $1,001 – $5,000 | 20% |
| $5,001 – $10,000 | 4% |
| $10,001 – $30,000 | 1% |
Children break budgets, and parents keep it a secret
More than two-thirds of parents from the survey (67%) spent money they didn’t have (using a credit card, loan or borrowed money) to purchase essentials — such as food, clothing or housing — for their children. And most parents (53%) went into temporary or long-term debt to buy nonessentials for their kids.
Why the excessive spending?
Most parents from the survey (52%) said they overspend because they want their children to have a better life than they did. And 40% of parents saw their excessive spending as an investment in their child’s future.
But despite their good intentions, many parents keep their child-driven debt a secret:
- More than three-fourths (77%) typically don’t tell their children
- Over two-thirds (69%) typically don’t tell other parents
- About a third (32%) typically don’t tell their partner
Peer pressure may spur parental spending
Social pressure, fear of judgment and social media could push some parents to borrow money for nonessential purchases for their children.
A quarter of parents (25%) said seeing other parents doing something on social media makes them more likely to spend money on the same activity. And a little less than a quarter (23%) made more than one purchase a year so they could post pictures of their children or family on social media.
Additionally, 27% of parents say they’ve spent excessively because they were either afraid of being judged by friends or other parents (11%), or because they didn’t want their kids judged by their peers (16%).
Tips to avoid overspending
Creating and following a budget can be an important first step in saving money. Here are a few additional tips that could help you avoid borrowing money for nonessential purchases.
Find ways to save on the essentials
From clipping coupons for your next grocery run to ending subscription services you never use, there are a variety of ways to decrease your monthly bills. You could even invest in energy-saving appliances or upgrades to your home, which could have a high initial cost but lead to monthly savings.
Consider financial assistance
Lower-income households may be eligible for a variety of assistance programs, including housing, healthcare and telecom subsidies. You can determine eligibility for federal and state benefits using the Benefit Finder assessment on Benefits.gov. You could also check with local governments, nonprofits and service providers.
Supplement your income
Cutting back isn’t the only way to add room to your budget. While parents’ time is often limited, finding a side job and earning extra income might be an option. Look for flexible options that don’t require a strict schedule or minimum hours every week. Consider checking out TaskRabbit for manual work or UpWork for freelancing opportunities.
Methodology
On behalf of Credit Karma, Qualtrics conducted an online survey in May 2018 of 1,000 parents who are over the age of 21 and located in the U.S. All percentages in this article are rounded to the nearest whole percent.