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. Many parents desire to give kids as many opportunities as possible, but it’s important to strike a balance between kids’ athletic dreams and their retirement dreams.
Create a budget to determine how much money you can 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. 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.
Only 2% of high school athletes are 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. 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.