If you’re the parent of a high-schooler, you’re probably deep into prom preparation at this time of year. And if a new Visa survey is correct, you’re complaining about how expensive it is.
American families with teenagers say they plan to spend an average of $1,078 on prom clothes, transportation, food, tickets and incidentals, a 33.6 percent increase over the $807 they spent last year, Visa reports. The company broke out expenditures by region, and the West (including Colorado) comes in at $744; the Midwest, $696; the South, $1,047 and the Northeast, $1,944.
The survey also found that parents who fell into the lower income brackets (under $50,000) plan to spend $1,307 — more than the national average. (Parents who makeover $75,000 will spend on average of $842. ) What’s more, parents are covering a greater share of the costs than the kids are. Parents said they’re planning to pay for 61 percent of the prom expenses.
The trend “is clearly fueled by the burning passion among high-school students to outspend and one-up each other,” according to Jason Alderman, director of financial education for Visa Inc. While some families are feeling fewer ill effects from the economy than they might have in 2011, it “by no means” accounts for such a big hike in prom spending, Alderman says.
“Prom might be a good time, but it shouldn’t be a family’s top financial priority,” he says .”You have to ask yourself: Are the kids’ college accounts fully funded? How about your retirement fund? Do you have a six-month emergency fund?”
He attributes some of the big spending on prom to reality TV. “The shows present all kinds of parties and that fuels their desire to spend inordinate sums of money. It’s OK for kids to want to do that, but it’s the parents’ responsibility to set limits,” he says.
“They should say, ‘Here’s what I’ve budgeted and you can save or work for the rest.” And have the conversation six months or a year in advance, rather than right before prom, Alderman advises.
“It’s a great teachable moment,” Alderman adds. “If they care about the clothes they wear, harness that passion” into helping them understand how expensive those clothes are. Suzanne S. Brown