Preventing overspending on kids’ sports
From equipment to private coaching and out-of-town tournaments–the cost of youth sports continues to rise.
So, what are ways parents can provide kids athletic opportunities without wrecking their financial future? Local Financial Professional, Barry Bigelow from Great Waters Financial has some answers.
How much are parents paying to put their kids in competitve sports?
On average, parents spend $671 a year. More than 20% of parents spend more than $1,000 or more on sports every year for each child. Bigelow says it’s important for parents to strike a balance between kids’ athletic dreams and their retirement dreams.
There are four ways parents can balance paying for sports and saving for retirement. What’s that first step?
The first step is to create a budget to determine how much money you are able to put toward extracurricular activities. Start by gathering all your financial statements for at least one month- bills, pay stubs, receipts- everything!
Figure out how much income you have each month. Break down your monthly expenses into two categories- fixed and variable expenses. Your fixed expenses stay relatively the same each month- things like your mortgage or rent, car payments, insurance, cell phone, cable/internet bills, etc.
Variable expenses are things that change from month to month like groceries, gas, entertainment, buying clothes, eating out and of course your kids’ extracurricular activities. Now you can compare your expenses to income. You want your income to be more than your expenses. If it’s not, you should look at making adjustments, starting with your variable expenses.
How can parents look for cost-saving alternatives?
If your kid is passionate about playing sports, there are ways you can provide them that outlet without breaking the bank. Pick a sport or two instead of one for every season. This will save you on equipment costs and travel expenses for a few months. Buy and sell used equipment from previous years. Consider rec leagues instead of traveling teams. Again, this will save you time and money while still providing competition for your young athlete.
What do you mean when you say parents should see the big picture?
All that money spent probably won’t get your kid a college scholarship. Only 2% of high school athletes are actually awarded scholarships at NCAA schools. There’s nothing wrong with helping your kids live out their sports dreams, but it should not come at the expense of your own retirement.
How can parents prioritize their retirement?
More than 74% of parents say youth sports are negatively impacting their ability to save and invest for retirement. Get your money priorities straight. Identify financial goals and commit to a plan. Parents who are behind in saving for retirement may want to consider getting help from a financial professional.