Times are still tough, gasoline is expensive, and families everywhere are having to tighten their belts. Except, it appears, for families this time of year with teenagers who have a date for the prom.
Despite continuing economic sluggishness, a survey by Visa shows that when it comes to high school proms, Americans are partying like it's 1999. This year, Visa says it appears that families with teenagers will spend an average of $1,078 each on the prom, a 33.6 percent increase over the $807 spent in 2011.
Out of control
"Prom season spending is spiraling out of control as teens continuously try to one-up each other," said 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 survey 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
Low income families spend the most
Unfortunately, Alderman says, the data shows parents in the lowest income brackets plan to spend more than the national average on their children's big night, usually going into debt. Families that earn between $20,000 and $30,000 plan to spend the most – an average of $2,635.
How could you possibly spend that much on a teen-age party? Well, there's a dress or a tuxedo, limousine rental, flowers, food, accommodations, and parties after the party.
To save on prom costs, here are a few ideas:
- 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.