The (Child) Enrichment Black Hole

"When do kids just get to sit in the yard with a stick? Do kids even know what a stick is?" -George Carlin

Author: Laura Rowley

My 8-year-old has decided she's had enough of piano lessons, something she begged for a year ago in an effort to keep up with her older sisters. She also abandoned soccer this season, declaring the practice sessions "boring." When I asked her what she wants to do instead, she said, "Hang out with my friends."
The problem is most of her friends are busy with after-school activities. Obviously parents want their kids to participate in a variety of artistic, athletic and intellectual pursuits so they can explore what they enjoy, get exercise and develop confidence. But the fast-growing enrichment industry is also getting a boost from parents overly anxious about their children's future prospects.
Donald Viscardi, a master tutor at Inspirica, a tutoring company in New York City, says business is up. "A lot of our families are on the higher end of the financial spectrum, and though they are feeling the recession, they're not looking to cut back," he said. "There's more attentiveness to tutoring so children will be set up for a good college education — knowing they may face a troubled economy coming out of it."
Some financial planners have also seen enrichment spending rise in response to the high unemployment rate. "It's this feeding frenzy — 'so-and-so went to such-and-such school and doesn't have a job!'" says Mary Clair Allvine, a Chicago-based certified financial planner.
Moreover, enrichment has become part of a spending philosophy that eschews accumulating things in favor accumulating experiences, says Allvine. "It's almost a third rail in parenting to suggest maybe your child doesn't need karate and soccer and handwriting camp and private swimming lessons rather than group lessons," she says.
The child-enrichment business grew enormously over the last two decades, partly because of demographics. The Echo Boom generation, born to baby boomers from the early 1980 to early '90s, is 70 million strong. (Their size is one reason elite colleges are turning away a record number of applicants.)
The enrichment industry got a boost from a 1997 White House conference on brain stimulation in babies. Although the event emphasized that nothing other than ordinary, loving care was needed for cognitive development, a $20 billion industry was launched, according to Susan Thomas, author of the 2007 book "Buy, Buy Baby: How Consumer Culture Manipulates Parents and Harms Young Minds."
Between 2003 and 2006, the number of videos or DVDs on Amazon.com aimed at children under age 2 grew to 750 from 140, Thomas reports. Sales of so-called "educational" toys rose 50 percent between 2002 and 2003 alone. A host of formal toddler classes and services rode a profitable wave of parental anxiety.
Highly competitive traveling sports teams, which once catered to middle-school and high-school students, are now enrolling children as young as 8, according to Forbes. That's despite a recommendation from the American Academy of Pediatrics that young athletes should only train in one sport per season, and no more than five days a week, with at least one day off from any organized physical activity. The academy also advises kids to take time off from a single sport for two to three months each year.

Aside from whether these activities are even necessary, a bigger question revolves around affordability. Unlike saving for college, these extracurriculars are part of an evolving process, not a hard target. "It's a sloppy area in the family budget," says Allvine. "As with any spending, when you haven't thought about what the objective is, and whether you are fulfilling the objective in the best way, you're going to have problems."

Enrichment is something parents refuse to deny kids even amid larger financial difficulties. Kelly, a mother of two, has her daughter in a dance troupe and her son in different sports year-round through the local recreation league, including travel basketball. Total cost is around $2,800 a year. But the family lives with her in-laws because they have hefty student loan and credit card debts from her husband's years in law school. (He changed careers when the kids were toddlers.)
"We aren't involving them in 10 things, they are picking one thing at a time," says Kelly, a grade-school teacher, who preferred to remain anonymous. "We are also cutting things we want to do so they have the opportunity to do these things. We really work to minimize what we choose to do to maximize what they can do."
This fall Kelly moved her daughter out of a competitive dance school that required multiple costumes and travel, and into a different troupe. "I don't think there was ill will or deceitfulness, but within the first few weeks of September it was way more than we thought it would be — choreography fees, costume fees," she says.
The world of enrichment opportunity taps into our deepest anxieties about what it means to be a good parent — and that can conflict with our financial behavior. MIT professor Drazen Prelec, who studies why people do irrational things with money, suggests that most consumers rely on internal spending norms acquired over time (i.e., "I never take a taxi unless it's an emergency" or "I never buy high-priced gourmet foods"). We feel a pinch of guilt — a moral tax, as Prelec calls it — when we break one, and this keeps spending in check.

But when the kids arrive, internal spending norms collide with deep-rooted beliefs about what it means to raise a "successful" child. Parents may suspend financial rules in favor of "ideal parenting" rules, which arise out of our childhood experiences, education, cultural norms and perceived competition with other parents.

"A lot of parents are very vested in the idea that 'my children are the epitome of me' and therefore must support them and give them every privilege," says Kathy Boyle, a CFP in New York. "A lot of stupid decisions are made keeping up with the Joneses." Extreme enrichment spending is stressful on a marriage, she adds. "That's a big thing people don't realize.

How can parents avoid the trap? If your kid wants to do everything, ask him to choose a total of three activities at most — a sport, an instrument, and an enrichment activity focused on the arts, sciences or a language.
Teaching limits is more important than anything they'll learn in karate, Allvine says. "One of the things I think is a long-term problem, even for parents who can afford enrichment activities, is that they are not teaching children tradeoffs, and tradeoffs are a fundamental building block of money management," Allvine says. "It's important to teach kids that financial resources are finite and teach them the skill of making decisions in a finite world."