Weekend’s here – odds are pretty high that you will spend at least part of it shuttling your kids around to a basketball or a football practice or a fencing competition or say a lacrosse game (a big deal at Stanford). And we are doing this all over the place and increasingly spending huge amounts of dollars on these extra-curricular activities. According to a recent TD Ameritrade survey, annual spending for coaching, top of the line equipment, personal trainers, tournaments and outlays for gas, airfares, hotels and food runs into thousands of dollars each year for a typical family. Nearly 20% of us, one in five are spending more than $12,000 a year on youth sports and that’s for one kid. You got three kids and you are spending $36,000 in a year on all this. That’s a grand per kid. And what do you think is the average mortgage payment in this country? A thousand bucks a month (take that Bay area). So we spend as much on youth sports as we spend on our homes. 63% of the families are spending between 100 to 500 bucks a month, 18% are spending between $500 and $1000 a month, 11% are spending between $1000 and $2000 and get this, 8% of American families, nearly one in ten are spending 2000 bucks a month on youth sports.
That’s fine. Actually that’s not fine but let’s assume that’s fine. So how are we paying for all this? 55% say they are cutting back on their entertainment expenses and 40% of them are taking fewer vacations. Okay, so we can argue that this is part of family’s entertainment. This is a form of vacation and the fact that they are cutting back on entertainment and vacations to fund this not only makes perfect sense, it’s perfectly understandable. But then 23% admit that they have cut back on the money they are saving for retirement. That’s a problem. So why are parents willing to cut back on their goal of funding their own retirement? Because that’s what their kids want and they don’t want to deny them that experience. Fair but 67% of the parents, 2 out of 3 say that they hope their ‘investment’ in their child’s sports activities will eventually pay off in the form of an athletic scholarship. Two out of three say that this is how they plan to get their kid into college and pay for it. That’s a bit crazy when we consider how many millions of kids are engaging in youth sports at any given time in our country and only a mere thousands get any kind of scholarship. And it gets even wackier. 34% of the parents who are spending money on youth sports, 1 out of 3 of us think that our child will go to the Olympics or turn pro. I understand as a parent to want the best possible outcome for our kids but that’s statistically crazy.
And there’s data that proves how insane the odds are. According to the NCAA, there are about 546,000 kids playing basketball in high school in any given year. Only 3.4% of them played NCAA basketball in college. Only 3.4% and of the 3.4%, only 1.1% went pro. Let me make sure you got that. 1.1% of 3.4% is 0.011 x 0.034 x 546,000 = 204. That’s 204 out of 546,000 or about 1 in 2,700 kids. But 1 in 3 of us feel that our kid is going to become pro. So somebody, somewhere is nuts.
If you want to have your kids engage in sports and this is how you have decided to spend your weekends, every weekend giving up your life to shuttle your kids around, that’s fine. But oftentimes doing that to engage in activities that your kid may not enjoy doing nearly as much as he or she claims to or you believe in because that’s how you’ll get your little one into college by having him or her turn pro or head to the Olympics and as a result of all this, you are not going to bother saving for college or your own retirement? And then we wonder why so many of us are falling short in meeting those goals. What we really need is a rational, methodically produced financial plan that evolves over time and that takes into account both our hopes and our goals so that we are not doing one thing or the other. We need to be able to identify resources to figure out how much money we can save or should be saving on a monthly basis, where best that money ought to be saved so that the child can enjoy his or her sports without making college entirely dependent on it and without risking in turn our own financial security. Yes, we can bake our cake and eat it too as long as we are realistic about it. We need to make sure that we are not setting our families up for failure. And while at it, let’s also make sure that what we are doing is what we ought to be doing with sports which is teaching the fundamental skills of competition, cooperation, teamwork, learning, lessons associated with leadership, developing physical and mental agility skills, learning the lessons of life that school and youth sports teach without going crazy thinking that our kid is going to go to the Olympics. They might and we all want it to but don’t bet the farm on it. Like with many other aspects of life, the process of getting there is more important than actually getting there. Enjoy the process and let the chips fall where they may.
Image credit – Stuart Seeger, Flickr