The astronomical costs of kids’ sports activities are consuming a larger portion of my clients’ spending recently. It’s not hard for the cost of sports (and other extra-curricular activities) to spiral out of control, especially when you have multiple children. How do you know when you have crossed that line?
This will vary based on your particular financial situation. My general recommendation is that recreational expenses make up 5 – 10% or less of a family’s after-tax income. Unfortunately, I’ve seen clients shelling out the equivalent of a luxury car payment (or small house payment!) on sporting related expenses. This is a real problem if these costs are preventing parents from paying down their debt and saving for their kids’ college.
Controlling the Astronomical Cost of Kids Sports
Where I’ve seen these astronomical costs crop up are in the “competitive,” “elite,” or “select” sports teams. Unlike recreational and most school-related sports teams, these elite teams regularly travel across state lines to compete. This adds additional, and sometimes outrageous, costs for hotel rooms, transportation, and restaurant meals.
These competitive teams frequently recommend student athletes pay for extra one-on-one coaching to improve their skills. Costs can mount up very quickly, and we haven’t even figured in the basic costs of joining the team and paying for sports equipment and uniforms! It’s not uncommon for me to see families shelling out almost $1,000 per month on one child for one sport. And if this same family has substantial credit card debt and no money in savings, this is not sustainable.
I’ve had parents object to my suggestion that maybe a recreational sports league would better fit their budget and still give their child the positive benefits of being on a team. “This money is an investment, because Connor’s coach said it’s very likely that he’s going to get a baseball scholarship.”
The reality is athletic scholarships are extremely hard to come by.
In fact, 0.51% (only 1 in 200) of high school boys who play baseball will receive an athletic scholarship. This varies by sport, of course. Most of the popular sports – baseball, softball, basketball, volleyball, soccer, swimming, and golf – are awarding less than 2% of high school athletes with scholarships. (Hint, if you really want your kid to get a sports-related scholarship, have him or her join the rowing team!). According to the NCAA, most of the popular sports – baseball, softball, basketball, volleyball, soccer, swimming, and golf – are awarding less than 2% of high school athletes with scholarships.
Look, I am not against kids participating in sports! It provides physical activity, teaches them about teamwork, and provides opportunities for friendship. I took karate lessons in high school and really loved it. It gave me confidence. It was an amazing outlet for stress. And I made new friends. I’m appreciative that my parents allowed me that experience. So, yes, I do want you get your kids involved in sports… but I don’t want it to become a black hole in your prosperity plan! If you are able to afford competitive sports and your kids want to do it, then by all means, go for it.
First and foremost, crunch the numbers to see what your family can realistically afford to spend on recreational expenses. Remember that sports are a “want” not a “need.” When you’re considering a sport for your child, be sure to investigate all of costs, not just the initial fee to join the team. Be realistic about your child’s chances of an athletic scholarship. It might be a better use of your money to invest the difference between the cost of a competitive team and a recreational team and deposit those funds in a 529 plan for college.
How much is your family spending on kids’ sports? Drop a comment and let me know!