FOSTER CITY, Calif., April 9, 2014 /PRNewswire-USNewswire/ -- According to a new nationwide survey released today by Visa Inc., American households with teens are reining in prom spending this year. The American average household will spend $978 in 2014 on the annual high school rite of passage. That's down more than 14% from the average $1,139 families spent on items including attire, limousine rental, tickets, and dinner in 2013. The sharp decrease follows three years of steady increases. By way of comparison, Canadian households will spend about 25% less than American households, at $723 U.S. dollars.*
Despite the drop this year, prom spending still remains disproportionately high and represents a major expense for American families with high school students. Visa is introducing a new, updated free smartphone app that helps parents and teenagers plan and budget every aspect of the prom.
The free Plan'it Prom app lets users make a realistic, detailed prom budget and then helps them stick to that budget by allowing them to track their spending as they shop. The app has been updated to include a redesigned user interface to appeal to teens, improved user experience to allow for easier budgeting and added sharing features via social media and text message. Plan'it Prom is available in the iTunes store, the Google Play store and from www.practicalmoneyskills.com/prom.
"The prom bubble has finally burst! I think people are realizing that prom is a dance, and you don't have to spend like a celebrity to have a great time," said Nat Sillin Visa's head of U.S. Financial Education. "We've released a new and improved Plan'it Prom app so that prom can be special on any budget. The fact remains that if your teen wants to dress, eat and travel like their favorite star on prom night, this offers the perfect opportunity to teach teens how budget and save for the night they can afford."
Visa's prom survey also revealed some interesting regional and economic disparities. States on the West Coast led the nation, spending even more than they did last year. The Midwest, once again, is spending the least, although they too are spending more than last year. The Northeast saw a 27% reduction in spending and the South a 23% drop, when compared with 2013. Regionally, the survey found:
- Western families will spend an average of $1,125
- Northeastern families will spend an average of $1,104
- Southern families will spend an average of $926
- Midwestern families will spend an average of $835
Some good news is that for the first time since Visa started the survey, parents who make less, spend less. Parents who earn less than $50,000 a year plan to spend significantly less than the national average, $733, while parents who make over $50,000 will spend an average of $1,151.
Parents under 40 years of age plan to spend almost 30% more than parent over the age of 40 at $1074 versus $842. Additionally, men plan to spend $1,357 – more than double the $673 women plan to spend.
The Visa survey also found that parents are planning to pay for 56% of prom costs, while their teens are covering the remaining 44%. This is an improvement from last year, but with parents still subsidizing this much of the total prom spending, there is still small incentive for teens to cut costs.
To save on the cost of the prom, here are a few tips:
- 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.
The Plan'it Prom app and tips are part of Visa's free, award-winning financial education program, Practical Money Skills for Life (www.practicalmoneyskills.com). The program reaches millions of people around the world each year. At Practical Money Skills for Life, educators, parents and students can access free educational resources including personal finance articles, games, lesson plans, and more.
The survey results are based on 4,000 live telephone interviews conducted nationally from January 24 – January 26, January 31 – February 2, February 7 – 9, and February 14 – 16 in cooperation with GfK Roper OmniTel.
*Calculated at .90, the March 10, 2014 exchange rate for $804 Canadian dollars.
About Visa Inc.
Visa is a global payments technology company that connects consumers, businesses, financial institutions, and governments in more than 200 countries and territories to fast, secure and reliable electronic payments. We operate one of the world's most advanced processing networks-VisaNet-that is capable of handling more than 24,000 transaction messages a second, with fraud protection for consumers and assured payment for merchants. Visa is not a bank and does not issue cards, extend credit or set rates and fees for consumers. Visa's innovations, however, enable its financial institution customers to offer consumers more choices: pay now with debit, ahead of time with prepaid or later with credit products. For more information, visit http://www.corporate.visa.com/.
SOURCE Visa Inc.