Cost of Prom is What?!?!
It's prom season and the class of 2013 isn't going cut rate. Prom spending is making a big comeback as the recession eases. A study from Visa and research company Gfk says this spring's average prom bill will top $1,110. Gowns are more elaborate and girls often want two pairs of shoes. One for their entrance and the other for dancing. And it's not just the girls who are going designer. Boys want designer tuxes. A gray tuxedo by Vera Wang is popular this year. It rents for $180 from Men's Wearhouse.
The cost of prom night rose 5% this year to an average $1,139 per attendee—a staggering sum that should spark frank spending discussions in every household with a teenager.
Only three years ago, the recession was fresh and families were vowing to tighten their belts for good. In that environment, prom spending on everything from dresses and tuxedos to limos and flowers totaled an average $807. That’s a lot. But as the economy improved spending shot passed $1,000 last year before jumping again this spring, according to an annual Visa survey.
Prom spending has been called the new social arms race, as both parents and their teens seek to stand out and choose to spend extravagantly for one evening.
The most troubling aspect of this spending free-for-all is the recurring finding that those who can least afford it are spending the most. In households with less than $50,000 of annual income, spending plans this year average $1,245; parents who make more than $50,000 will spend an average of $1,129. Two years ago, Visa found that the top prom spenders had household income under $30,000.
Prom night is also an opportunity for single parents to spend lavishly on their teens—forking over an average $1,563, which is almost double the $770 that married parents will spend.
Recognizing that prom has become a major expense for teen-bearing households, Visa recently introduced a smartphone Plan it Prom app that lets users make a detailed budget and track spending as they shop. See it on iTunes or at practicalmoneyskills.com.
To save on the cost of the prom, here are a few tips:
Shop for formal wear at consignment stores or online. Many outlets rent tuxedos and formal dresses and accessories.
Have make-up done at a department store’s cosmetics department or enlist a friend to help.
Split the cost of a limo with other couples, or simply drive.
Take pre-prom photos yourself and have the kids use cell phones for candid shots at the events.
Work out a prom budget in advance and set a limit for how much you will contribute. If teens want to spend more, encourage them to earn the money first.
Finally, when peers are overspending it’s a perfect time to do your part to make fiscal responsibility cool. Talk about how much you saved with little real sacrifice—not about how much you spent. Then set the difference aside for something you’ll need in the first semester of college, like books or a new computer. It will only hurt for a day.
*Courtesy of TIME Magazine