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household finances

Lisa Van de Geyn, seen helping her daughters with homework at home in Vaughan, Ont., in February, says many parents she knows spend too much on their children because they feel they have to keep up with their friends.Christopher Katsarov

Today's parents are sparing no expense on their children's lifestyles – be it lavish birthday parties with a price tag of $1,000, tutoring sessions to help them get ahead or competitive hockey fees than can run above $20,000 for a single season.

But for some parents, this over-the-top spending on their kids is leaving them mired in debt and stressed about their financial future.

"The overspending starts when you're pregnant and from there it snowballs," says Lisa Van de Geyn, author of Babie$: The Real Story of How Much They Cost. "You shouldn't go into debt doing all these things. But that's what happens."

Ms. Van de Geyn says she realized she was guilty of spending too much on her kids at a recent birthday party for her two daughters, who are 7 and 9. She chose a spa party with seven friends, which included manicures and pedicures for the school-aged guests, as well as snacks.

"It was $500 – I almost choked when I paid the bill," Ms. Van de Geyn says. "I was stunned that I had spent that much."

Ms. Van de Geyn says many parents she knows feel they have to keep up with their friends. They believe that if they don't spend $700 on a video-gaming party in a private van – or $10 on each party loot bag – they will lose social status. But "nobody is prepared for the sticker shock," she says.

It all adds up. A 2015 Statistics Canada report found that couples with children spend $34,441 more than their childless counterparts a year on household expenses. A significant portion of these costs go directly on credit; the ratio of household credit market debt-to-disposable income rose to 167.3 per cent in the fourth quarter of 2017, according to Statscan.

For some parents, the decision to spend on enhanced learning is considered a necessity. Alexandra Stabins, president and founder of in-home tutoring firm,, sees many parents – from all income groups – paying as much as $4,800 a year in tutoring fees. "They'll give up everything for their kids," she says. "Every second child is diagnosed with [learning disabilities] and parents feel they need tutors."

And for parents such as Linnett Fraser, a 43-year-old HR business partner, it can be hard to say no if your child shows special talent in a particular area. Her now 18-year-old daughter has been in competitive dance since she was five, winning awards and scholarships along the way. She's now studying dance at George Brown College in Toronto and aspires to be a professional dancer.

Ms. Fraser, who lives with her mother and two kids in the Toronto suburb of Etobicoke, says she has been spending $2,000 to $3,000 in costumes annually, $2,000 for competitions, $1,500 for dance lessons, plus hundreds on choreography fees, clothes and shoes. "You don't think of this stuff because you're just paying as you're going," she says.

John Fleming, a financial adviser with Edward Jones in Toronto, sees many clients in their 40s and 50s who are spending thousands on their children's activities – without thinking through the consequences. "Do you really need to have your child in so many activities?" he asks.

"I certainly make it a part of the conversation," Mr. Fleming says. "Most parents just focus on the RESP but they don't think of the day-to-day spending."

He adds: "A lot of Canadians are running up their lines of credit to secure these opportunities for their children."

He suggests clients come clean with their financial adviser – and discuss all of these fees. The next step is to develop a household budget, which accounts for these expenses and offsets this spending in other areas.

The key, Mr. Fleming says, is living within your means. It's something Shayna Goldman-Corapi takes to heart. A teacher living in Bradford, Ont., with two boys, ages 5 and 3, she has made her own baby food, chosen inexpensive community-centre-driven activities and scaled back on birthday parties.

But she admits she still feels social pressure. "My friends have these extravagant, over-the-top parties for their kids," she says. "The feeling of keeping up with these expensive parties sucks."

Ms. Corapi is worried about her boys' sports interests, which for the moment revolve around less-expensive activities, such as soccer and swimming. "We do soccer in the summer. But if [they choose] hockey, I don't exactly want to say no," she says.

"We're just going to have to cut back."