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Crazy Prom Spending: Even Financially Challenged Families Spend More Than $1,000 on Prom [POLL]

In Life by Kim Muraro , on Tuesday, April 17, 2012, 7:07 AM (PDT)
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The Average U.S. Family Spends $1,078 on Prom Night

The economy may still be chugging along more slowly than we'd all like, but there's one industry that is doing better than ever, as a report by credit card company Visa reveals that American families are spending an average of $1,078 on prom, up from $807 last year.

The Visa report, based on 1,000 telephone interviews conducted last month, led a representative to conclude that "prom season spending is spiraling out of control as teens continuously try to one-up each other."

Read: Christina Ricci Oscars Dress Lent for High School Prom

The report, detailed at the Daily Mail, also found that peer pressure and teens' desire to ive like celebrities lead to the out-of-control spending.

How out of control is it?

Visa's survey found that even parents who earn less than $50,000 a year said they plan to spend an average of $1,037 on their kids' prom nights, while families in higher income brackets -- those who earn $75,000 or more -- planned to spend between $700 and $1,000 on prom.

Even more surprising: families who make between $20,000 and $29,999 a year plan to spend more than $2,600 on prom, meaning some families will spend more than 10 percent of their yearly income on prom.

Wow. Call it the "My Super Sweet 16" effect.

Read: Jessica Simpson Gifts Deserving Teens with Prom Dresses

"This is social-arms-race spending. It's extreme," the Visa rep said.

One more interesting figure: the Visa survey revealed that the teens themselves only cover 39 percent of the prom costs, while their 'rents pony up the other 69 percent.

"One of the reasons that prom spending may be running amok is that parents are paying the vast majority of the costs, giving teens little incentive to economize," Visa rep Jason Alderman said.

"It's important to remember that the prom is a high school dance, not a wedding. Parents need to set limits in order to demonstrate financial responsibility."

Tell us:

Take Our Poll

Is $1,000 too much to spend on the prom?

  1. Yes! Like the guy said, it's prom, but ultimately, it's just a high school dance, and if teens don't have the perspective on that, it's up to their parents to keep the spending in check.
  2. No. It's a once in a lifetime experience, and that's really important to some people.
VOTE

Results

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