Do you have any children? Are your children active in sports?
If so, it could really be costing you — so much so that it’s jeopardizing your financial health.
We all know that kids are expensive. In fact, it’s estimated that the cost of raising a child, excluding college expenses, is some $266,600. That’s per child, so if you have two kids, you’re looking at more than a half million dollar investment. Four kids? Yeah, you’re paying more than $1 million for them before it’s all said and done. And if your kids are active in extracurricular sports, you could be paying even more.
It’s estimated today that as many as 27 percent of parents spend more than $500 per month on their child’s sports activities. This cost can go even higher if a father is invested in their child’s athletic future, studies say. About 20 percent of dads spend anywhere from $500 to $999 per month on their children, with 7 percent admitting to spending more than $1,000 a month on them.
But what is it all for? The NCAA estimates that out of the 8 million U.S. high school student athletes, less than 500,000 go on to play college sports. Even fewer go on to play professionally. With the odds so low of any child reaching the ultimate sports milestone of turning professional, is spending so much money on sports really worth it in the grand scheme of things? If your kids are playing sports for the right reasons, the answer is “yes.” But if you as a parent want it more than the kids, then it might be time to rethink priorities. Living vicariously through your child’s sports goals is an issue for another day, however. This is a money-related post, after all.
Regardless of why your kids play sports, it’s important not to let it get in the way of your financial future. Studies show parents that are more willing to pony up the big bucks for their children when it comes to sports activities are less likely to save toward a retirement fund. Here’s a look at some tips to keep those financial goals on track, even if your kids are costing you big bucks each month:
- Create savings “buckets”: Create a few different “buckets” relative to the things that you want to spend money on. If your kids play sports, then one of these buckets should be geared toward them, and the money in it should go toward sports camps, lessons, etc. But one of your other buckets should go toward your retirement fund. Make sure you’re putting money into this as well. Perhaps another bucket is a rainy day fund or goes toward family vacations.
- Have regular budget meetings: Hold budget meetings on a monthly basis to assess where you are financially, what adjustments need to be made and, in some cases, what sacrifices you need to make to ensure that certain things of importance are funded. As a side note, we’d suggest skipping the family vacation for the year or holding off on sending your child to sports camp if it means you can still adequately invest in your retirement.
- Keep your financial future a priority: Don’t skim your retirement account with the intention of making up for it later. You know how that goes, once you cut back on something, it’s very difficult to make the commitment to bring it back once again.
We’re not saying that you shouldn’t be allowing your kids to play sports. It’s good for them, as it helps teach them about teamwork, develop leadership skills, and it gets them out of the house and off the couch. But we are saying that you should be smart about it. Remember, very few kids ever make it professionally, let alone ever compete as a student-athlete in college. Sports are games, and games should be fun for your child. And no game should ever come in the way of your financial future.