If your prom involved borrowing dad's station wagon to drive to
the school gym for the dance, you might not recognize the spectacle
that the prom has become today. The costs of the dress, tux and
dance tickets are often just the beginning, and the average bill
for the evening's merriment is growing.
According to a recent survey conducted by Visa, families are
planning to spend an average of $1,139 to send a teen to prom in
2013. While teens are helping to shoulder a portion of this
expense, the survey raises the question of how families can plan
responsibly for this frequently costly event.
Single and low-income parents most likely to
In breaking down average spending by region and family type, the
survey uncovered some noteworthy patterns. For instance, single
parents are planning to spend much more for prom on average than
their married counterparts. For 2013, single parents said they plan
on spending an average of $1,563 on the dance. Married parents are
planning to spend less than half of that, or $770.
Likewise, low-income families plan to spend more than other
parents. Visa reports that households earning less than $50,000 a
year plan to spend an average of $1,245. Households earning more
than that plan to spend slightly less, at $1,129.
In terms of regions, Visa discovered families in the Northeast
are the biggest spenders, planning for an average of $1,528 in
dance expenses. Families in the Midwest are planning to spend less
than those of any other region in the country, and less than half
of what Northeastern families spend, at $722.
Paying for prom
Who is paying for all this fun? According to Visa, parents are
responsible for most of the expense, although teens are picking up
41 percent of the tab on average.
"The prom is an opportunity to teach teens
how to budget
," said Nat Sillin, head of Visa's U.S. Financial Education, in a
written statement. "If they want that sparkling dress, fancy
dinner, and limo ride, this is the opportunity to set a budget and
Given the rising costs of prom, parents may want to sit down
with their teens to discuss their expectations and plans for prom
well in advance of the big night. In conjunction with its survey,
Visa launched a Plan'it Prom budgeting app for Apple and Android
devices. Should a teen's dreams outweigh their wallet, the card
issuer recommends students consider sharing some expenses with
friends or taking their own photos to cut costs.
To help encourage a joint saving effort between teens and their
parents, families may even want to consider opening a separate
savings account to build prom savings. A savings account from an
online bank may be ideal because these accounts are often easy to
open and are likely to offer higher interest rates than the
accounts offered by traditional banks,
according to recent MoneyRates.com research
But whatever approach families take to paying for prom,
selective restraint and careful planning may prove essential in
preventing the big night from becoming a financial mess.