Another study/survey, another demonstration of just how out of touch most parents are when it comes to their child’s chances of securing an athletic scholarship for college.
How out of touch? In the latest wakeup call (assuming anyone is listening), TD Ameritrade revealed the staggering number of ways parents are sacrificing their financial future to fund their kids’ sporting activities. Examples include:
- 27% of parents (especially dads) spend $500+ per month on youth sports
- More than 20% of families spend $12,000 per year
- One-third of families take fewer vacations to fund their kids’ sports activities
- Roughly 20% of parents take a second job or delay retirement to pay for youth sports
- The same percentage of parents reduce savings and retirement accounts
If these figures don’t shock you, consider that one-in-five families are spending the monthly equivalent of a mortgage payment on their children’s sports programs (roughly $1030). Yes, you could buy a house for what these folks are ‘investing’ in youth sports.
TD Ameritade isn’t alone. In a survey by Lending Tree, 79% of parents confessed to going into debt to pay for their child’s expenses. Incredibly, 87% of these people believe those expenses are investments that could pay off in the form of scholarships and the post-collegiate careers that come with them.
Unfortunately, the data shows that, despite what these parents think, their dollars are being spent, not invested. Virtually none of them will see a return on those youth sports investments beyond the traditional benefits (i.e., confidence, fun, competitiveness, etc.).
“The finances don’t make sense,” says Villanova University professor Rick Eckstein, an expert on youth sports. “The financial payout is exaggerated in the eyes of families.”
Even the NCAA takes pains to point out how exceedingly rare athletic scholarships are. The organization notes that just 2% of high school athletes receive a scholarship offer from a university, and of those only 1% receive an all-expenses-paid ‘full ride.’
Translated, this means that the 2% in question are, at most, receiving token financial support. It also means those dollars would have gone farther in a virtually any other investment scenario.
None of this means parents should stop spending on youth sports. But it does suggest that parents might want to dial it back a bit and instead encourage their kids to get out and play just for playing’s sake.
So mom and dad, if you’re going to spend big bucks on youth sports, at least be honest about what it’s likely to buy you and your kids. Hint: an athletic scholarship isn’t part of it.