Let’s start with this.
A promposal, as extravagant and expensive as some may be, is not the subject of a typical Bamboozled column.
But these increasingly lavish moments are Bamboozling your kids. And you. And your wallet.
For the uninitiated, a promposal is, at its core, one student asking another to prom. But it’s grown into something that rivals wedding proposals, with students going all out to wow a prospective prom date.
Asking someone to the prom is stressful enough without adding the pressure of creating a spectacle worthy of YouTube.
We won’t even get into the big spending promposers who get a “no” answer.
Visa’s annual survey of prom costs said last year, teens planned to spend $324 on average — just on the promposal.
Again, on just the promposal. Asking someone on a date.
That’s a third of the average $919 teens planned to spend for the entire shindig, the study found.
The average cost was even higher in our part of the country, with those in the Northeast planning to spend $1,169 on prom. And $431 of that was just on the promposal.
Last year was the first time that Visa included promposal costs in the survey. The 2016 survey hasn’t been released yet.
What’s almost as shocking as the numbers is that parents are paying for it. The study said parents planned to cover 73 percent of prom costs, up from 56 percent in 2014.
“Teens have no incentive to cut cost with parents still subsidizing this much of the total prom spending,” the study said.
And that’s an important point, and where the Bamboozling comes in.
School pictures + testing fees + class trips + prom = more than you might think.
You see, families of typical high school seniors have lots of expenses and some big financial decisions to make.
There are the senior trips, the yearbook pictures, the yearbook itself and other high school memorabilia. There’s getting a car and insurance for new drivers.
Costs for college prep. Standardized testing. Tutors. College visits. College applications fees. And then the big nut: college tuition.
All those costs can exceed $10,000 in the senior year, we found while reporting a story for Inside Jersey magazine a few years back.
THE TEACHABLE MOMENT
Parents who foot the bill are missing a teachable moment.
Preparing for prom can be a money lesson that sticks with your children for the rest of their lives.
Without a doubt, consumers Bamboozle themselves when they don’t have a handle on their finances.
New Jersey makes the top 10 list of states whose consumers carry the most credit card debt. We owe an average of $8,406 on our plastic compared to the national average of $6,304, according to a BankRate.com survey that compiled data from the Federal Reserve and the census.
At 15 percent interest — the average interest rate according to Credit.com — and if you make monthly payments of $150, it will take 91 months, or 7-and-a-half years, to pay it all off.
We’re spending money we don’t have.
Next to your home, paying the expense of a college education — or two or three — will probably be the most expensive purchase of your lifetime.
We’re willing to guess you don’t want that fate for your teen, so here’s what you can do.
Budget: Rather than pay as you go, help your teen create a spending plan. Your teen should write a simple list of all the items for the prom and related activities. Then split those items into “need” and “want” categories so your teen can have realistic expectations and prioritize for the big day. Assign dollar values, or at least estimates, for each item. Then be clear about what you are and aren’t willing to pay for, and how much.
Work: Money doesn’t grow on trees, so it’s time for your senior to get to work. Any job and any money earned will help defer the costs. If you don’t want your student to work outside of the home for fear it will interfere with his or her studies, consider offering paying jobs around your house so they at least have some skin in the game.
Save: Whether it’s in a jar or a bank account, your teen should be the one in charge of saving. He or she will watch the account grow over time, and if the saving isn’t happening fast enough, your teen could adjust the budget to fit what they can afford. If your teen needs added incentive, consider a matching program where you add a certain percentage based on what the teen sets aside.
Learn about debt: Of course we’re already in prom season so there’s not a lot of time remaining to save for the big day. If your student wants to spend more money than he’s accumulated, consider giving a loan. But like any lending, make it official. Draw up a payment plan, with interest, and a monthly payment that will be due every month. Your teen can continue working and saving to pay off the loan when the party is over.
But wait, you say: The money Junior was going to earn over the summer is supposed to go to college costs.
The teachable moment comes full circle.
We all have to make decisions about how we save and spend our money. We set priorities. When there’s not enough money to go around, we start to cut our budgets and eliminate items from the “wants” category.
Or we go into debt to live a lifestyle we can’t afford.
How has your family handled prom costs? Let us know in the comments section below.
Have you been Bamboozled? Reach Karin Price Mueller atBamboozled@NJAdvanceMedia.com. Follow her on Twitter @KPMueller. FindBamboozled on Facebook. Mueller is also the founder of NJMoneyHelp.com. Stay informed and sign up for NJMoneyHelp.com’s weekly e-newsletter.