Children and Money

How To Create a Magical Birthday Party on a Budget

How to Create a Magical Birthday Party on a Budget | www.TheHeavyPurse.comAs I mentioned last week, November is special to me as Lauren was born this month. I can still remember the intense love and fierce protectiveness I felt when I held her in my arms for the first time. Those feelings have never wavered. I am blessed to be her Mom, and I’m so excited to watch her grow into an amazing young woman.

With her birthday fast approaching, we are in the midst of planning her birthday party. For the past few years, Lauren has managed her birthday party budget. Now this may seem like a strange birthday tradition to have Lauren plan her own birthday party, but developing a healthy relationship with budgets has been one of the best gifts I could give her.

The Gift of Budgets

Whenever I bring up budgets to clients, there is almost always a wince or grimace. Very few people like budgets. They find them restrictive and cumbersome. Few use them for those reasons, which makes it so much harder to live within their means. It’s a prevalent mindset and one I don’t want Lauren and Taylor to acquire, so I started working with them on budgets when they were small and on something they cared about deeply, like their birthday party.

Lauren’s First Birthday Budget

When I gave Lauren the budget for her birthday, she was thrilled. She thought she hit the jackpot! We sat down to discuss what she wanted to do at her birthday party. Her big wish was to go out for dinner with her friends, then host a big sleepover at our home. Sounds pretty affordable, right? Not quite so fast. She wanted a limo to pick up her friends and take everyone to restaurant and our home. There went the affordable part.

So we wrote that down on her wish list and started adding other things she wanted. The list kept growing and growing from the things Lauren wanted to the things I reminded her she needed, like napkins and drinks. By the end of the conversation, it was a long list, but Lauren wasn’t worried: she had a HUGE budget, or so she thought.

Budget Lessons from Lauren’s Birthday Party

Armed with her list, Lauren started pricing out her dream birthday party. It wasn’t long before her big smile began to fade as she realized how much things cost and how quickly even what appeared to be a large sum of money could disappear.

In the end, she was significantly over budget and I was secretly pleased. Lauren was sad that her dream birthday party appeared out of reach, but I told her we weren’t done yet. I shared with her my philosophy around budgets. They don’t restrict us as so many people believe, but give us freedom. Budgets give us the freedom to use our money on what matters most.

What is Your Must-Have Item?

So I asked Lauren out of everything on her list, what mattered most? What would make her birthday amazing and unforgettable? Her answer: the limo ride. She had her heart set on that, which of course, was the most expensive piece to her dream birthday party. But I didn’t argue or ask her to compromise ā€¦ yet. The limo ride was her must-have item, and she would have to build her budget around the cost of it, which meant she would need to prioritize and make some compromises.

Prioritize and Compromise around Must-Have Item

We then went through her old list and she immediately removed items that meant very little to her. She then ranked the remaining items from highest to lowest priority. It wasn’t easy as she certainly wanted everything, but she knew in order to get what she wanted the most that she had to be ruthless with the remaining items. Did she really need the fancy napkins or would a plain, colored napkin suffice? A cake from her favorite bakery or one from the grocery store or even a homemade cake? She once again added up the cost of her dream birthday party, but she was still over budget.

Comparison Shop to Get The Best Deal

I was proud of how much Lauren had trimmed from her budget, and it would have been easy to give her a little extra funding, but that’s also a bad habit so many of us form. Budgets lose their power and effectiveness because we always give ourselves permission to go over budget. And that money has to come from somewhere. So even though we could have technically paid for the excess without an issue, I held firm because I knew there was one avenue Lauren hadn’t explored yet — comparison shopping.

So Lauren went back online and start doing some comparison shopping, looking for deals and ways to cut costs without having to eliminate something she wanted. She found some good bargains when she stumbled upon a great deal that only required a small compromise to her original must-have item, but would significantly impact her budget. She was able to find a limo company that would pick up all of her friends at their individual homes, drive them to the restaurant and then to our home for the sleepover for ā€¦. drum roll, please ā€¦.. the low cost of $45, which included the tip.

That’s right. $45. It meant going at an off-peak time, which was fine by her and her friends. Young kids don’t mind eating an early bird dinner. šŸ™‚ She was so thrilled because she was not only able to get her must-have item, which was really busting her budget, but was now able to add some items back in.

A Magical Birthday Party on Budget

Lauren had a magical, unforgettable birthday party, full of great friends, food, presents and karaoke in a limo. šŸ™‚ But the best gift, in my opinion, was learning to embrace budgets and to see that she could have a dream birthday party on a budget. To figure out what matters most, then build her budget around it. To make compromises and look for bargains to help stretch her budget. Lessons that will serve her long after the birthday candles are blown out and the presents are unwrapped.

Lauren has continued to plan fabulous birthday parities every year while making her budget. Some day I imagine Lauren schooling her friends, who complain about budgets and how awful they are, on how wonderful they can truly be with a mindset shift and the knowledge they actually give you freedom.

Shannon

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November 10, 2014  •  28 Comments  •  Children and Money

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  1. Monday, November 10th, 2014
    $45 for the limo ride? Seriously, that was a score on Lauren's part even if it was off-peak hours! I absolutely enjoyed this story. I really like the idea of you entrusting her with her birthday party budget. That is a great way to teach a child about how to manage money!
    • Shannon Ryan
      Tuesday, November 11th, 2014
      It was an amazing deal. She was tickled pink and had such a great time. I was so happy we didn't give up and kept searching. I absolutely believe that children need firsthand experience. I can talk about budgets until I am blue in the face but actually experiencing it themselves is when things begin to sink in.
  2. Monday, November 10th, 2014
    "Budgets give us the freedom to use our money on what matters most. " <-- YES! By planning where your money goes, you can make choices based on your priorities. Without such a plan, it's near impossible. My budget absolutely gives me freedom. And way to go implementing this budget system with your kids - no doubt it's setting them up for success in the future.
    • Shannon Ryan
      Tuesday, November 11th, 2014
      We definitely have the same budget mindset, Natalie. I don't view them as restrictive but a way to ensure that I spend my money on what matters most. The girls have really begun to embrace budgeting and it makes me so happy. I hope it prevents the "I hate budget" mindset from ever developing.
  3. Monday, November 10th, 2014
    I love the idea of giving a child a budget for their b-day! I had my daughter (several years ago) help me create the least expensive b-day party ever (she had a GREAT time) and it was a smashing success....but we never put a number on it for her. My kids are both past the age of b-day parties, but we can find other ways to use this tool. My daughter periodically has little get together with her friends (she just had a Halloween party) and my son likes to have computer gaming parties. We could apply the same "here's your budget" for these activities! thanks for the idea, Shannon!
    • Shannon Ryan
      Tuesday, November 11th, 2014
      Absolutely, Travis! Your kids may be past the traditional birthday party stage but having them budget for their gatherings is another great way to give them budget experience. It will open their eyes to costs and becoming budget savvy at a young age is great skill set to develop.
  4. Monday, November 10th, 2014
    What a great way to teach that lesson of prioritization- and how quickly the money goes. It's so much more powerful for her to work it out for herself rather than just having you say "no".
    • Shannon Ryan
      Tuesday, November 11th, 2014
      Thanks, Stefanie! It was very eye-opening to her because she truly thought she had found the pot of gold at the end of the rainbow. She discovered how quickly money goes and how much things cost. And she was still able to create a magical birthday party for herself, which was my ultimate goal.
  5. Monday, November 10th, 2014
    I LOVE that you gave Lauren a birthday budget!! Last year was the last "large" birthday we had for Will and we discussed the cost of providing it for him. He agreed that he didn't need anything that big going forward and we have decided on a small sleepover this year with a few friends. We will lose sleep of course, but at least we will save a bunch of money from previous years.
    • Shannon Ryan
      Tuesday, November 11th, 2014
      Thanks, Shannon! Sleepovers are definitely becoming the trend with my girls too. They are definitely cheaper but we pay for it in other ways. LOL!
  6. Monday, November 10th, 2014
    What an awesome story!!!! I love that she wanted a limo ride - how cute!! Good thing you're training her early - sounds like she has expensive tastes. ;-)
    • Shannon Ryan
      Tuesday, November 11th, 2014
      Thanks, Laurie! I was surprised with her request for a limo ride but we do live in LA. :) She definitely likes nice things, like her Mom, but she always has a good grasp that she has to earn those things, not to expect to them, which is what matters to me. :)
  7. Monday, November 10th, 2014
    Sounds like Lauren had a super fun birthday party! :)
    • Shannon Ryan
      Tuesday, November 11th, 2014
      Thanks, Mackenzie! She definitely did. :)
  8. Monday, November 10th, 2014
    "Budgets lose their power and effectiveness because we always give ourselves permission to go over budget." I think this is by far the toughest for parents who want to bless their kids. It's easy to give a child $2 more to purchase that item they've come up just a bit short on. But holding the line and saying "No" is one of the most powerful things we can do teach them about budgeting.
    • Shannon Ryan
      Tuesday, November 11th, 2014
      I think it's a trap a lot of parents fall into, Brian. We love our kids and want to make them happy so we think what's a few dollars. But it's a bad habit to get into and behavior to model to our children. Holding the line is one of the powerful lessons we can teach them.
  9. Monday, November 10th, 2014
    I think this is nice. She had some control over things, and when it didn't work within the budget, she had to compromise. Real life!
    • Shannon Ryan
      Tuesday, November 11th, 2014
      Exactly, Michelle. I must admit that was my goal, so I didn't mind her initially going over budget because I knew the lessons she would learn would be invaluable.
  10. Monday, November 10th, 2014
    I love that you can get a limo for $45! I don't even think we'd have any options like that, but what a great way to make it memorable. I think if kids always get what they want it isn't really all that meaningful. By arranging and budgeting and shopping around, she learned life skills and had a killer party.
    • Shannon Ryan
      Tuesday, November 11th, 2014
      I was just as surprised as you were, Kim! It was an amazing deal! Yes, when kids get handed everything they want, things start losing their value and kids feel entitled. But by learning how to identify her top priority and compromise and search for deals, it meant a lot more to her than if I had just arranged everything myself.
  11. Monday, November 10th, 2014
    This is some really great advice. I know a lot of parents - especially in the middle class - are pressured to spend a ton of money on kid's birthdays. It's not something I'm looking forward to but my wife is crafty and good at saving money so I think we'll be just fine : ) Not to mention we have your great advice to go off of!
    • Shannon Ryan
      Tuesday, November 11th, 2014
      Awwww ā€¦ you flatter me, DC! :) Yes, there is a ton of pressure to have blowout birthday parties that break the piggy bank. A magical birthday party can happen on a budget. And I'm sure your wife's craftiness will be a huge asset when it comes to planning and decorating.
  12. Tuesday, November 11th, 2014
    I love it that you didn't automatically nix the limo wish. I'm sure I would have. The off-peak timing bargain wouldn't have occurred to me. I have a daughter who is approaching her 16th birthday. I'll give this idea a go.
    (Still waiting for the e-mail with information about how to buy your book The Lemonade Stand and have it shipped to Canada : )
  13. Wednesday, November 12th, 2014
    I loved how you gave Lauren the responsibility to decide where she was going to make cutbacks and then work out ways that she could get her 'must have' item. It would have been so easy to say no to the limo and the end result would have been Lauren being disappointed and not learning this valuable lesson!
  14. Wednesday, November 12th, 2014
    Happy birthday to Lauren and congratulations to you Shannon for raising such a cute and smart girl! lol about the limo ride, but that was such an impressive bargain, I am in awe. My parents usually did birthdays out of the house, bringing cake and games to a park or when they felt lazy, 10 kids to McD, where you would get games and cake for barely more than the price of a Happy Meal, and no house to clean. But it is so much better when you ask Lauren to pick and prioritize what is really important, so you can get rid of the extra stuff she won't remember. I am sure her friends still talk about that limo ride.
  15. Thursday, October 22nd, 2015
    That's such a cool way to give your kid the birthday they want and have it stick to a budget you're happy with. I wish these were the kinds of lessons my parents taught me when I was a kid. Our budget had zero wiggle room when I was a child while my parents paid off $30,000 in credit card debt. So for a long time, any money I had, hastily and greedily got spent on expensive things I knew my parents never would have gotten me otherwise. Little kid Veronika would have been amazed by a limo ride to a birthday party!
  16. Friday, December 4th, 2015
    Wow, it sounds like you got a really great deal on that limo ride! It also seems like you guys had a great time. I had never thought about how fun that would be, I may have to look into that. Having a limo pick you up for your birthday dinner must make the night feel really special. Thanks so much for sharing!
Shannon Ryan SHANNON RYAN, CFPĀ®
  • Meet Shannon

    "As a Certified Financial Planner, it is my passion to help individuals and families build a healthy relationship with money. I look forward to helping you raise financially confident kids.ā€ - Shannon Ryan
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