Between the hours of 3 PM and 7 PM in every single town in America, parents take to the roads ferrying their kids back and forth from soccer games, dance classes, piano lessons, football tryouts, and scouts meetings. Extracurricular activities offer kids opportunities to participate in special programs that they will not have access to during school, or at home. They are an important part of any child’s life, and in many cases, these activities may even form their future career or college choices.
However, some parents may not realize that the money they are spending right now on these extracurricular activities might be limiting those very same college choices for their children. A good financial checkup for any family will include taking a step back, and weighing the benefits of extracurricular activities now, versus more available college savings in the future.
Here are a few things for parents to consider when looking at this equation.
Activity Fees and Supplies Add Up
What started out as a once-weekly community Little League can often explode into a
calendar full of practices, games, award ceremonies, and practices. Sports are notorious for having high price tags associated with equipment costs. Outfitting your child for sports, especially if they’re going through a rapid growth spurt, could cost you hundreds of dollars each season. In many cases, the school or community teams do not have enough equipment to cover everyone, so parents usually wind up stepping in to pick up the financial slack.
Of course, even if your child is involved in quieter, more indoor activities like an art class or science club, you may be astonished to see the list of required supplies, and their associated prices. It is usually up to the parents to buy everything from canvas to safety goggles, and then hand these over to the activity directors before your child can join.
And that’s before we even get to the topic of tuition. Dance lessons, music lessons, gymnastics, etc. all come with a weekly or monthly fee. If your child really likes their activity, they will probably want to add more classes or practices on to their calendar, meaning higher and higher tuition costs.
What to Do About It: Many parents are not fully aware of how much money is going out the door for these extracurricular activities. As a first step, write down all tuition, activity fees, equipment costs, and supply purchases so you can see how much you are really spending. Consider drawing up an activities budget, and keeping your costs within an acceptable range.
Hidden Costs Are Everywhere
Beyond tuition, and beyond equipment and supply costs, there are many hidden costs associated with extracurricular activities. For one thing, families who find themselves running around between classes and practices often don’t have time to sit down for dinner at home. This might mean there are a lot of stops at restaurants, or fast food pickups to help these busy parents squeeze dinner into their day.
Speaking of food, if your kids are involved in athletic activities, you may notice that they can suddenly eat a lot more than they used to. Their increased activity will come with an increased need for calories – but speaking practically, it means your grocery bill could be going up.
Travel is another expense that can sneak up on parents. Driving back and forth to a neighborhood dance studio is one thing, but taking the entire family out of state for a competition will suddenly involve expenses like hotel rooms, tolls, meals, and possibly even tickets to the event.
And of course, let’s not forget the fundraisers. You may be called upon to attend silent auctions, barbecues, and car washes, all of which will wind up costing you money. Some activities require that children sell a minimum number of candy bars, pizza kits, or scented candles in order to maintain their spot in the activity. Guess who picks up the extra if kids fall short of their quota?
What to Do About It: Get as much information as you can before joining a new activity. Talk to other parents or activity directors about costs that fall outside the realm of basic tuition and equipment. If your kids are already involved in activities, take stock of how many hidden expenses rack up over the course of a month, a year, etc.
Are Extracurricular Activities Necessary?
Kids who have positive experiences in their activities will tell you that they add something important to their lives. Parents will also talk about all the ways in which extracurricular activities helped their kids grow into more confident and capable people with wider social circles and more life experience.
In other words, for many families extracurricular activities are very necessary.
But that doesn’t mean that you should dump money you might have otherwise saved for college into an overpriced activity – and indeed, many families may be doing just that without realizing it.
The average family will pay over $700/child per year just in activity-related fees. In high school, it’s not unheard of for that number to go over $1000. If you add private lessons or elite teams, this amount couple be $4000 to $5000. Wouldn’t it be nice to have some of that back in a college savings account?
What to Do About It: Prioritize and limit activities. If your child is showing a lot of promise as a clarinet player and really enjoys the activity, maybe you can go ahead and let go of the dance class she complains about anyway. By focusing on a few activities that are very meaningful to you and your child, and cutting out extras, you can substantially reduce your spending in this area. One fewer activity per week could mean a lot of extra college savings over the years.
Parents want to give their kids the best possible opportunities, but when they get too wrapped up in the present, they can inadvertently make things more difficult in the future. This is why it’s so important to have a clear financial plan. A trusted financial advisor can help you plot out and achieve your financial goals for your kids, ensuring that their expenses now and in the future are manageable.
For a more in-depth look at how to begin planning out your financial goals for your kids, download our free guide titled “Back to Basics.”