Parents are spending more than ever on their children’s sports with the hopes that they will make it to the big leagues.
And dads are often the ones likely to shell out the most cash on their children’s activities, according to a new survey from TD Ameritrade.
Yet spending more with the hope that your child will make it big could have consequences for your finances, particularly your own retirement.
The survey, which was conducted online between February and March, included 1,001 adults ages 30 through 60. Of those respondents, those who were considered “sports parents” had one or more children in elite or club competitive sports and had more than $25,000 in investable assets.
The result: 27 percent of parents spend $500 or more per month on youth sports.
This was especially true for fathers, 20 percent of whom spend $500 to $999 each month per child on youth sports. Meanwhile, 7 percent of dads admitted they spend $1,000 or more.
27 percent of parents spend $500 or more per month on youth sports.
That money is going towards everything from equipment to private coaching to tournaments out of town, according to Dara Luber, senior manager of retirement at TD Ameritrade.
Those dads may be reliving their youth or reviving their own professional sports aspirations, Luber said.
But the one thing those fathers — and all parents — need to be wary of is whether those costs will force them to make sacrifices in other important areas.
For the parents surveyed, that could mean cutting back on spending on entertainment or vacations. It could also mean taking on a second job or delaying retirement.
One in 5 dads surveyed said they worry about how their spending on their children’s sports will impact their retirement savings.
TD Ameritrade also found that sports parents are less likely to save for retirement through a 401(k) plan or individual retirement account than they were three years ago.
“There is nothing wrong with helping your son or daughter realize their sports dreams, but it definitely shouldn’t come at the expense of your own retirement or understate your family’s needs,” Luber said.
The survey showed that sports parents spend twice as much time on their children’s activities than they do on financial planning.
A better way to think about your family's financial future
To keep your money priorities straight, Luber recommends committing to a plan.
Start by identifying your financial goals and creating savings buckets for each of them — your retirement, your children’s education, vacations and sports, to name a few.
Be sure to fund those priorities in order of importance, putting your retirement first, Luber said.
Then, have regular budget meetings with your family, so that your children understand the trade-offs of participating in costly sports programs, such as forgoing a family vacation.
“Make sure that you regularly review and make adjustments as needed,” Luber said.
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