The Economics of Children’s Birthday Parties

Recently, a young child that lives nearby (age six or so) had a large birthday party at his home for all the children on the block that were approximately the same age (four year olds to eight year olds, roughly). The party was in the family’s fenced-in backyard and included a magician, two horses, and a barbecue with a folk music band for all of the adults. To top it all off, there was a giant tarp over something in the backyard, and when the tarp was lifted (after the birthday cake), it revealed a play/tree house that must have easily cost $5,000.

As a parent, I can understand the superficial appeal of having a massively over-the-top birthday party like this for my children. It would be incredibly fun to load up house and home with parents and children, make it a very fun day for everyone with little eye toward expense, and have an amazing present at the end that all of the kids would enjoy.

The sheer joy of all of those children would be quite wonderful. But it comes with a few steep prices.

The Cost of a Big Birthday Party

1. It sets unrealistic expectations for your children

Unless you’re equipped to spend obscene amounts of money regularly, you’ve set them up to be disappointed on some level by future birthdays. It’s fun to have a birthday party, but when it stretches the limits of what’s reasonable (and what you can reasonably afford), then it begins to stretch their expectations, often to a threshold that you won’t be able to afford in the future.

2. It encourages consumerism

A giant birthday party with a mountain of presents is a rush of acquisition of “stuff.” No matter how well thought out the gifts are, a huge pile of gifts translates to a huge pile of stuff, and a huge pile of stuff translates into an expectation of more stuff.

3. A big investment in a birthday party is a big investment that’s not going towards long term savings

This isn’t a big deal if you’re a multimillionaire that already has college in the bag, but it’s a huge deal if you’re not there. If you drop thousands of dollars now on a party or a toy that they’ll only play with for a little while and at the same time haven’t adequately covered that child’s future, you’re making a choice that puts their future at risk for a birthday party.

Plan a Memorable and Reasonable Birthday Party

Keep the invitation list reasonable

While it’s fun to have a lot of kids in your yard, keep the list short enough so that all of the children are comfortable with and familiar with each other. This makes the party more fun for everyone and also keeps the expenses under control, as it’s easier to feed and entertain eight children than thirty.

Put a strict cap on gifts from guests – or request no gifts at all

This helps fight the “mountain of gifts” that is prevalent at large birthday parties, which just gives a home a plethora of toys and clutter that’s not necessary. Tell the guests not to bring presents at all – or, if you feel that they should, ask that the presents be very small.

Children can entertain themselves

Just come up with a few games that require minimal equipment and everything will go great. No need for an entertainer or any sort of expensive entertainment spectacle.

Cut back on the food – only serve cake

I’ve been to many birthday parties where there was a meal served, and as a guest I thought it was overkill. Keep it simple – just have a small, homemade birthday cake and a big bucket of ice cream. Total cost: less than $10.

Consider a slumber party

This enables you to dramatically reduce the guest list and at the same time create a memorable party for the child. Just invite three or four of the child’s closest friends and have them spend the night as the party.

Consider a private party

In other words, the only people invited are the people who live in the house. This keeps the party extremely simple, but also quite intimate. Many of my birthday parties as a child were like this and I remember them quite fondly.

Utilize public resources

Have a birthday party at the park, using the shelter house as a place to manage the party. This makes cleanup easy and the park is natural entertainment for the children.

Ask your child what they want – and don’t plant any ideas

You’ll often be surprised at what your child comes up with for what they want to do on their birthday. One of my nephews only wanted one thing for one of their early birthdays: to ride on their cousin’s four wheeler. Another one wanted to pull weeds out of the flower patch in the front yard and redecorate it (seriously). You might be shocked at what they want to do for their birthday, and if it’s reasonable at all, let them do it.

Remember that this party isn’t for you, it’s for the child

The party should revolve around what your child wants, not what you want. If your child wants to just have his best friend over for a sleepover and have hot dogs for supper, go for it even if it’s not what you’d envision for a birthday celebration. Let it be your child’s day, but just keep it within reason.

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