Foster City, Calif. (CBS SACRAMENTO) — As high school teens across the country prepare their dresses and dates for their annual prom events, a new survey finds that spending by teens and their families has fallen amid this year’s “prom bubble burst.”
The new nationwide survey from Visa Inc. finds that American households with teens will show more frugality this year, with the average household spending on attire, limousine rentals, show tickets and dinner dropping 14 percent from last year. The average U.S. household is expected to spend $978 for 2014 prom amenities, down sharply from 2013’s average of $1,139 per family.
“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, in a statement to Market Watch. “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.”
The survey found that parents are picking up 56 percent of the prom bill, with teens covering the remaining 44 percent of costs. In contrast to all previous years of the survey, lower income parents are planning to spend less than high-earning parents.
An October report from asset management firm Piper Jaffray & Co. found that prom-going teens were spending less on clothes and other accessories despite expressing more confidence about the U.S. economy.
“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,” Visa said in a statement.
The Visa survey conducted through 4,000 live telephone interviews in January and February also revealed spending differences in various regions of the country.
West Coast families led the nation in planned spending, with families expecting to shell out even more than last year. The Midwest will once again spend the least of all regions, but data showed that Midwestern families will also spend more than they did in 2013.
But the Northeast and the South both showed large reductions in spending, with 27 percent and 23 percent reductions from 2013, respectively.
By comparison, Canadian households are estimated to spend about 25 percent less than Americans, at $723 per household.
In addition to the prom survey, Visa announced the launch of a “Plan’it Prom” mobile app aimed at helping high school teens prepare a prom budget.