Are American families overspending on proms? A new survey released by Visa Inc. shows that the average family with a high school student attending the prom will spend $807 – a surprisingly large number.
Despite continuing economic challenges for many families, teenagers and their parents appear willing to spend a significant sum on prom attire, transportation, tickets, flowers, pictures, and other items for this annual social ritual.
"Prom inflation has run amok. Ever more extravagant proms create a cycle of teenagers continuously trying to outdo each other, making the evening more and more expensive," said Jason Alderman, Senior Director of Global Financial Education at Visa Inc.
Additionally, economic and regional disparities clearly exist in prom spending. The survey found:
- Southerners will spend an average of $542
- Northeasterners will spend an average of $667
- Midwesterners will spend an average of $943
- Westerners will spend an average of $1,073
- Parents who make less than $50,000 will spend $778
- Parents who make more than $50,000 will spend $916
Defying this trend, nearly a quarter of families will spend nothing on prom, likely indicating they are not attending. Overall, 22% of families who have teenagers will not spend any money on the prom. In the Southern and Midwestern states, that number jumps to 29% and 27% respectively.
Visa's award-winning financial education program – Practical Money Skills for Life (www.practicalmoneyskills.com) – is offering some tips to help manage prom spending:
- 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.
- Work out a separate prom budget with your child well in advance to determine what you can afford. They may need to take a part-time job to help cover costs, or decide which items they can live without.
Jason Alderman, national personal finance expert and director of Visa's financial education programs, Practical Money Skills for Life (www.practicalmoneyskills.com) and What's My Score (www.whatsmyscore.org), is available for interviews to discuss the survey findings as well as offer consumers tips on how they can budget properly for the prom.
*The survey results are based on 1,000 telephone interviews conducted nationally from April 21 - 24, 2011 in cooperation with GfK Roper OmniTel.
# # #