What’s your New Year’s resolution? I have a few: Get to the gym more often, read more books, and spend less money. Wish me luck.
When it comes to that last one – spending less money – I’ll be in good company. According to the Fidelity New Year Financial Resolutions survey, 31% of resolutions set this year revolve around money. It’s a natural thing to think about as we try to start off the new year on the right foot, but it’s also a reflection of our country’s mood as we slowly emerge from a recession. Even as consumer confidence bounces back, many continue to struggle with damaged credit, unemployment, and foreclosure.
Moms in particular are feeling the squeeze. According to our annual Cost of Raising a Child survey, two out of three moms are worried about having enough money to raise their kids – an 11% increase since 2013. More than half say they have these worries frequently, and 58% of them say they’re planning to limit their family size for financial reasons.
The perfect storm of financial stress
Moms are feeling the pressure from many sides. For one thing, having kids is expensive. Our survey reveals that parents now spend an average of $13,000 per year on each child, with first-time parents shelling out even more for insurance, new cars, and baby gear.
Second of all, as heavy users of social media, moms are subject to a constant stream of envy-inducing posts on Facebook and Instagram. Whether their single friends are sharing snaps of their latest luxury vacation or their fellow moms are humble-bragging about their kid’s designer sneaker habit, the pressure to keep up is intense. Nearly 60% of moms confess to feeling pressure to appear well-off on social media, and to feeling envy and embarrassment about their own financial situation.
Are bargains the answer?
It’s true that moms love a bargain – for example, 72% of smartphone-using moms say that coupons are by far the most appealing feature in mobile advertising. But savvy marketers know that price is not the only thing on Mom’s mind. According to our 2014 Millennial Mom Report, 85% of moms say proven product safety is a very important consideration when choosing a brand, 67% say it’s important for a product to simplify her life, and 61% say it should match her lifestyle and personality.
It’s also helpful to remember that 38% of moms who scan products in the store say they’re looking for product reviews, and 16% say they want more information about ingredients. So it’s clear that moms are weighing many considerations when deciding on a product or brand’s value, and that they crave instant information at the point of purchase.
Little luxuries are still important
Despite all this financial pressure, moms still like to treat themselves to affordable luxuries such as designer accessories and beauty products. As the 2014 Deloitte Global Powers of Luxury Goods study points out, many luxury brands are now developing products for the mass market and selling them online, with flash sites such as Gilt.com offering discounts of up to 60% on brands that were previously inaccessible to the average consumer.
Unfortunately, this increased temptation can encourage bad financial habits. Nearly 30% of moms say credit cards are their most common method of payment, and two-thirds of moms have $25 or less in their wallet at any given time. That may be a function of our increasingly digitized purchase habits, but when moms start carrying a balance on their credit cards, fees and interest charges quickly add up.
Resolution: Help Mom spend wisely
If you want to earn the loyalty of a powerful but challenging demographic, consider these resolutions:
1. Offer coupons and discounts, but remember that Mom is looking for value. Be sure she has access to reviews and information about your product’s benefits.
2. Offer affordable indulgences that satisfy her need for luxury and social bragging rights.
3. Always be sensitive to the financial strain of parenthood, and do what you can to help Mom maintain her financial health.
Here’s wishing everyone a healthy and successful 2015 – financially and otherwise.