"He that is of the opinion money will do everything may well be suspected of doing everything for money." - Benjamin Franklin

Money Lessons Learned from Birthday Parties

By , January 12th, 2012 | One Comment

happy birthday cake

Birthday parties can be a lot of fun. They can also be a source of great aggravation and angst, both for the party host and the celebrant. Some of this comes from the emotional aspect of birthdays, but some of the angst comes from the financial cost of the party. Sometimes it’s a combination of both factors that leaves everyone involved angry, upset, and sorry that anyone ever thought about the birthday in the first place. Whether a birthday party is fun or miserable, you can learn a lot about money, though.

It’s less about the birthday and more about outdoing others

I’ve been to a number of parties where the clear intention of the host was to make some kind of statement. It was either a, “Hey, look at us,” over-the-top kind of party, or a party that took something someone else had done to a new level. In either case, the party was less about celebrating the birthday and more about outdoing someone else. The cake has to be bigger and more elaborate, the theme is overdone, and the food is elaborate. I’ve seen this happen for everything from big birthdays like a 50th to a child’s first birthday (and at one year old, the kid doesn’t have any clue so an over the top party is almost always about making some kind of statement). While throwing a big party is fine if it’s genuinely what everyone involved wants and can afford, the truth is that many parties are just a way to make a statement about wealth, class, or trendiness.

The Lesson: Over-the-top birthday parties are often a symptom of “keeping up with the Joneses” disease. People who suffer from this have to not only keep up with others, but outdo them, too. This leads to overspending as the race to be bigger and better escalates out of control. It happens with houses, cars, clothes, and even parties. It often goes so far that people end up buying and doing things they don’t even like just so they can keep up. Maybe no one really wanted a huge birthday party but only had one because they felt they had to. The solution is to step away from the race and buy only items that you genuinely like and can afford. This may mean choosing the smaller house, buying off-brand clothes, or having a simple birthday cake and dinner at home. You’ll be happier and wealthier in the end.

Listen to what others want and honor that, or at least compromise

This one is an offshoot of lesson number one, above. I’ve seen many birthday parties where the birthday boy or girl is clearly uncomfortable with the fuss and expense. It’s almost always revealed at some point that, “I just wanted a quiet dinner at my favorite restaurant, but my husband/wife wanted to throw this big party.” This leaves the celebrant unhappy and ultimately the host is miserable, too, because he/she feels like their efforts were unappreciated.

The Lesson: When it comes to spending money on anything, be it a party or a TV, really listen to what the other people involved are telling you. If they’re telling you they don’t want a big party or a fancy new car, listen. Don’t waste the money on something that isn’t going to make everyone involved happy. (This is particularly true in the case of gifts. If someone says they don’t want something, don’t assume that they’ll change their mind if you go ahead and buy it. Get them what they ask for.) If you can’t reach an agreement, at least try to compromise. Offer to cut the size of the party in half, or to opt for a smaller sized TV. Everyone will be happier if the decision is a compromise rather than one person just doing everything their way.

If you’re not careful, things can quickly escalate beyond what you can afford

Birthday parties often start out as simple things. Maybe a few friends, a few frames of bowling, or a small dinner out with friends. The next thing you know, though, it has somehow mushroomed into a big affair that includes a catered meal and entertainment. It probably starts with some well-intentioned advice from friends or family and then you start seeing things that would add to the fun. Before you know it the event has ballooned and so has the budget. You’re left scrambling to cover the costs.

The Lesson: Things like parties, Christmas, and other spending occasions can quickly get out of control if you’re not vigilant. Even something like buying a new refrigerator can get out of control if you start thinking you need every option and protection plan the salesman is throwing at you. Whenever you’re spending money, guard against this by setting a budget before you begin and then sticking to it. If you can work in some extras and stay within budget, great. If not, do without. You don’t have to take every suggestion that someone offers and you don’t have to choose every option. Stick to what you can afford.

No one will really care or remember what you did. At least not for long

Whatever you end up doing for a birthday will not be remembered by your guests for long. If it’s a simple affair or an elaborate party most people won’t really remember it for long. Sure, they may occasionally refer to some aspect of the entertainment or a particular food that really stuck with them, but on the whole they’ll move on with their lives and forget about your party. It’s that way with many things. People just won’t remember that you blew thousands of dollars and if they do, they won’t care.

The Lesson: No matter how much you might want to think you’re impressing others with your big spending ways, the truth is that most people won’t care and won’t remember. If you’re spending thousands on clothes, no one’s really going to notice or care unless your name is Kate Middleton. No one will really notice or care about your fancy car, either. People are involved with their own lives and just don’t pay as much attention to what you do as you might think. They might be wowed at the time, but in the long run your big party or house will be no more remembered or impressive than the small party held at the bowling alley.

Sometimes you need to keep other people in mind, too

Too many people host parties that other people cannot afford. It used to be that the host was expected to absorb the entire cost for the party. If you wanted to have a big dinner, then the host paid for everyone. But etiquette has changed and I see more parties where the guests are expected to pay for their own meal, or to contribute to the entertainment budget. This leaves some people angry and resentful because the host has chosen something that is out of their budget. Their choice then becomes to either skip the party altogether or to pony up money that they don’t have/want to spend.

The Lesson: If your planning for others to contribute to your party, event, or purchase, make sure you take their budgets into account. You may want to buy that big screen TV, for example, but if you’re going to expect your roommates to contribute to the cost, you need to get something you can all afford. If you want to throw a big party at the most expensive restaurant, make sure your guests don’t have a problem with that. If you’re buying a group gift for a coworker, don’t get something so expensive that others will balk at contributing. When you’re spending money and expecting others to chip in for part of the cost, keep their budget in mind and plan accordingly. Not everyone may have or want to spend as much as you do.

The next time you have a birthday or are invited to a birthday celebration, watch and listen closely. Chances are you’ll see some useful money lessons in action. Of course, it always seems that the more miserable the birthday, the more money lessons that are on display. If you’re ever at a horrible birthday party, console yourself with the notion that at least you’re probably learning about money and what it can and cannot buy.

(Photo courtesy of Will Clayton)

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  • Cynthia says:

    We had a lovely birthday party for one of our friends the other day and we made it an Indian themed buffet. We played Indian music as well. The main reason for this was that Indian food is relatively inexpensive to make … mostly lentils and rice (and we like it a lot). We have the good fortune of some good cooks in our friend group, but most importantly, none of us is doing all that well financially. The home party is the norm for us. And we generally express gratitude toward one another with our works rather than our money.

    In our friend group it is proper etiquette to bring food to gatherings. When it’s a special event, we bring even nicer food and we coordinate our dishes like we did for this birthday.

    Someone who everyone knows is going through a hard time can bring rice, home baked bread or lentils. Someone who can’t cook, can always bring chips or a salad.

    We even had a pot-luck for my wedding. Everyone who brought a dish brought it by slightly early and to make everything beautiful by placing it in finer dishware. We have a friend who’s got a large set of matching serving dishes; this helped.


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