Take a moment to think back on your high school days -- if you dare -- and imagine it's prom season. What would your parents have said if you asked for $1,000 for the dance and all the expenses associated with it?
Today's parents are saying yes, according to a survey recently released by Visa Inc. In fact, the average amount of money that American families are spending is $1,078, which is over $200 more than they spent last year.
Why and how are two good questions you may have. And part of the first answer could lie in "Super Sweet 16"-style spending. Jason Alderman, senior director of Global Financial Education at Visa, says prom spending "is spiraling out of control as teens continuously try to one-up each other."
The actual ticket is often the cheapest part. By the time a student buys a dress or rents a tuxedo, a couple hundred bucks is already out the window. And when you throw in accessories, flowers, dinner, professional pictures and (take a deep breath) a limo, you may need to plan on working overtime.
The survey shows that money spent varies by region. People in the Northeast are spending the most on average -- about $2,000 per family -- while those in the Midwest are spending the least at $700.
But the statistic that Visa describes as "troubling" is how prom spending differs by family income. In general, the lower the income bracket, the more Americans are likely to spend on prom. For parents who make more than $75,000 a year, for example, prom spending averages about $850. For those making between $20,000 and $29,999, average prom spending leaps to $2,635 -- the most of any income bracket.
What's not surprising is that parents are covering most of the cost, according to the survey: They're paying for 61 percent of the date, while their teenagers are putting up about 39 percent.
There are a number of ways to keep costs well below that $1,000 mark, though. Andrea Woroch, a consumer savings expert, suggests a good starting point for young ladies could be renting the dress. (And honestly, when and where else are they ever gonna wear it?) Other suggestions include splitting the cost of the limo with other students, though some can simply drive themselves, and combing the web for do-it-yourself hairstyling tips.
Visa adds a suggestion that coincides with Financial Literacy Month: Set a budget with teenagers and encourage them to stick to it. An effective way to do this is to mandate that anything over budget be paid for by the prom-goers.
It's true that the cost of living has gone up since you stepped out for the dance, but so has the cost of keeping up with the Joneses and reality TV stars. The answer to whether it's worth it lies partially with your teenager and partially with your pocketbook.