Kids require three things: love, lots of work and money.
There's nothing wrong with indulging your children every once and a while. Yet constantly overspending on gifts, birthday parties, sports or vacations is a common mistake most parents make even if it comes at the expense of their own savings and retirement.
In its latest family spending survey, T. Rowe Price found 46 percent of parents said they'd gone into debt buying something their kids wanted.
Spoiling the kids is an issue that comes up often in meetings with clients, said David Bahnsen, a certified financial planner with The Bahnsen Group in Newport Beach, California.
"The most common example is parents underfunding their own retirement for their kids' college, which then has an impact on their own long-term stability."
Going into debt to throw a lavish wedding, neglecting to sell your small business to keep the children employed or over-accommodating to the point where adult children are not working are other frequent examples, said Bahnsen.