Peer pressure could be costing you £865/yr - Money - News - Moneyfacts


Peer pressure could be costing you £865/yr

Peer pressure could be costing you £865/yr

Category: Money

Updated: 08/08/2016
First Published: 05/08/2016

Think of peer pressure and you'll probably think back to your teenage years, or perhaps the more grown-up phenomenon of "keeping up with the Joneses". But did you know that it can affect your bank balance as parents, too? Research from Sainsbury's Bank has highlighted the issue, finding that peer-pressured parental purchases can add a significant sum to your annual outgoings.

Expensive habit

The research found that nearly half of parents (48%) feel compelled to make peer-pressured purchases for their children, such as smartphones, expensive clothing and pricey parties, and doing so can add a whopping £865 per year to the average annual household expenditure.

The need to have the latest technology, such as phones and tablets (44%), tops the list of parental-pressured purchases, followed by clothing (43%) and school trips and excursions (42%). Extra-curricular activities can also take their toll, with 30% of parents feeling pressured to pay for membership to clubs and societies (such as football club and scouts), while 27% think they need to pay for expensive children's parties or birthday gifts – often simply because other children get the same treatment.

All those costs can quickly add up. Indeed, 77% of parents with children under 18 admit to spending an average of £90 a month on clubs and hobbies for their ankle biters, while 36% spend around £143 by paying for private tuition. The cost of birthday parties can ramp up, too, and it can get even pricier when they grow up, with 52% of parents expecting to pay for significant 16th, 18th and 21st celebrations.

Simon Ranson, head of Banking at Sainsbury's Bank, commented: "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."

It can be easy to feel peer pressured these days, particularly with the likes of Facebook offering a platform for parents to show off their flashy treats. But that doesn't mean you need to get carried away.

Trying to explain the value of money to children so they don't automatically expect the latest gadgets could be a great place to start, or help them build their own savings pot with a children's savings account or junior ISA. Building up your own savings fund so you can cover those extra treats will of course be vital, and as ever, no matter what you're buying, make sure you do your research to get the best deals!

What next?

Compare children's savings accounts

Build up your own emergency cash reserves with an easy access account

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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