BY NEDRA RHONE

The Atlanta Journal-Constitution

Ever hear the one about the 4-year-old with an iPod Touch?

It goes like this: Parents buy their son the $200 gadget. The preschooler plays games, listens to music and maybe even video chats with other iPod-enabled preschoolers.

Kid loses pricey device. Parents yell at kid for being irresponsible.

Sound incredible? Wondering who would do such a thing? Look in the mirror.

Bundle.com, a company that assesses consumers' spending habits, recently released a survey on the topic.

Many parents seemed to grapple with how much is too much. How do you know if you are spoiling your kids? And if your kid is spoiled and you know it, what harm have you done?

The Bundle.com survey examined spending by households with children at stores that sell toys, clothing and other services for tots, kids and teens. Cities were ranked based on average spent over the past three years. New York City topped the list, followed by Brooklyn; Miami; Minneapolis, Minn.; Tulsa, Okla.; Dallas; Atlanta; Los Angeles and San Diego.

Julie Bookman, editor of Atlanta Parent magazine, acknowledged the tendency to overspend on kids.

"With so many two-income families, even in today's economy, many families have the means to give their kids more than many of us had growing up," she said. "The line today has really been blurred between needs and wants."

Bookman said she's heard her staffers' stories about the mom who gives her gently used designer bags to her 4-year-old, or the 6-year-old who took a limo ride to a hotel restaurant for ice cream and cake on her birthday.

"Parents are indulging themselves and their kids," Bookman said. "We are such a product-driven society."

Overindulgence isn't always linked to wealth. Competition with other families can drive spending choices, and so can guilt.

Some parents spend more money on their kids because they feel bad about working. Others may feel guilty that they don't have enough money for the latest gadget, but rather than have a child go without, they put themselves in financial straits to get it.