SAN FRANCISCO, April 13, 2012 /PRNewswire/ -- Despite continuing economic sluggishness, a new national survey by Visa Inc. shows that when it comes to high school proms, Americans appear to be willing to spend ever increasing amounts. American families who have teenagers will spend an average of $1,078 each on the prom, a 33.6% boost over the $807 spent in 2011.
"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 prom spending data 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
One troubling statistic is that parents surveyed who fell in the lowest income brackets (less than $50,000) plan to spend more than the national average - $1,307. Breaking down the spending by family income, the survey found:
- Parents who make under $20,000 will spend an average of $1,200
- Parents who make $20,000-$29,999 will spend an average of $2,635
- Parents who make $30,000-$39,999 will spend an average of $801
- Parents who make $40,000-$49,999 will spend an average of $695
- Parents who make over $50,000 will spend an average of $988
- Parents who make over $75,000 will spend an average of $842
The Visa survey also found that parents are planning to pay for 61% of prom costs while their teens are only covering the remaining 39%.
"One of the reasons that prom spending may be running amok is that parents are paying the vast majority of the costs, giving teens little incentive to economize," Alderman added.
To help manage prom spending for items such as attire, limousine rental, tickets, flowers, pictures, food, accommodations and after parties, Visa offers it'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.
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.
*The survey results are based on 1,000 telephone interviews conducted nationally from March 30 – April 1 in cooperation with GfK Roper OmniTel.
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 digital currency. Underpinning digital currency is one of the world's most advanced processing networks—VisaNet—that is capable of handling more than 20,000 transaction messages a second, with fraud protection for consumers and guaranteed 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 www.corporate.visa.com.
SOURCE Visa Inc.