Prom season is fast approaching, but the average household with a teenager planning to attend the big dance is not budgeting quite as much for corsages, limos and attire this year. According to Visa’s annual prom spending survey, American families plan to spend an average of $978 this year, down from $1,139 in 2013.
This is the first year that prom budgets have dropped after ballooning for three years in a row. Still, prom remains a major expense for many families. From prom tickets and dinner to formal dresses and tux rental, not to mention limo service and corsages, prom spending is no small burden.
The good news for parents? More teens said they are pitching in to help pay for prom this year than last. Parents plan to pay for over half of the cost (56%), but high-schoolers are picking up the rest of the tab, according to survey results.
Visa app helps budget
Visa’s Plan’it Prom app, free from iTunes and Google Play, helps families make a budget, track their prom spending, and find ways to save. Visa updated the app this year to be more teen-friendly, adding features that utilize social media and text messages.
“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,” said Nat Sillin, head of U.S. Financial Education for Visa.
Spending varies by region and income
On the national level, the average family planned to spend less on prom this year than last, but that is not the trend across the country. Households on the west coast planned to spend more this year than last ($1,125), as did families in the Midwest ($835). The drop in average spending was due to families in the Northeast and South who were tightening the purse strings. They planned budget reductions of 27% and 23%, respectively.
For the first time in the history of the survey, families in lower income brackets planned to spend less than the national average. Households earning less than $50,000 per year planned to spend only $733 while households making more than $50,000 planned an average budget of $1,151.
The Visa prom spending survey was conducted through live telephone interviews with 4,000 households across the United States between February 2 and 16, 2014.