April 17, 2012 5:04 am
"Prom season spending is spiraling out of control as teens continuously try to one-up each other," according to Jason Alderman, senior director of Global Financial Education, Visa Inc. "It's important to remember that the prom is a high school dance, not a wedding, and parents need to set limits in order to demonstrate financial responsibility."
The prom spending data also revealed some interesting regional and income level disparities. Families in the Northeast will spend twice as much as every other region of the country. Regionally, the survey found:
- Northeastern families will spend an average of $1,944
- Southern families will spend an average of $1,047
- Western families will spend an average of $744
- Midwestern families will spend an average of $696
- Parents who make under $20,000 will spend an average of $1,200
- Parents who make $20,000-$29,999 will spend an average of $2,635
- Parents who make $30,000-$39,999 will spend an average of $801
- Parents who make $40,000-$49,999 will spend an average of $695
- Parents who make over $50,000 will spend an average of $988
- Parents who make over $75,000 will spend an average of $842
"One of the reasons that prom spending may be running amok is that parents are paying the vast majority of the costs, giving teens little incentive to economize," Alderman added.
Visa offers the following tips for sensible prom expenditures:
- Shop for formal wear at consignment stores or online. As with tuxedos, many outlets rent formal dresses and accessories for one-time use.
- Have make-up done at a department store's cosmetics department or find a talented friend to help out.
- Split the cost of a limo with other couples, or drive yourselves.
- Take pre-prom photos yourself and have the kids use cell phones or digital cameras for candid shots at various events.
- Work out a separate prom budget with your child well in advance to determine what you can afford. Set a limit of what you will contribute and stick to it. If teens want to spend more than that, encourage them to earn the money to pay for it or decide which items they can live without.
Published with permission from RISMedia.