May 28, 2019
In hopes that their children will earn college athletic scholarships or even make it to the professional leagues, many parents are spending a significant portion of their income and time on youth sports. But are they neglecting their own finances?
The answer is yes: According to findings of a new survey conducted by The Harris Poll on behalf of TD Ameritrade, 74% of U.S. parents who pay for youth sports expenses are unable to succeed in saving and investing for retirement.
The survey, which was fielded between February and March, was conducted among a cohort of 1,001 adults, ages 30 through 60. Among the 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.
However, those assets were being whittled down by their children’s athletic participation. Fully 27% of the sports parents admitted to spending $500 or more per month to see their kids on the field. That money is going toward everything from equipment to private coaching to tournaments out-of-town, according to Dara Luber, senior manager of retirement at TD Ameritrade.
And it’s no surprise that it’s the Dads who are spending the most. Specifically, 20% of the fathers surveyed said they spent between $500 and $999 each month per child on youth sports. Worse yet, 7% said they spent $1,000 or more.
And they are trying to catch up financially: In order to pay for their kids’ sports expenses, parents are taking fewer vacations (36%) or working a second job (19%).
Luber advises parents to think about the cost of sports in terms of how it will affect them—not the family as a whole. “While securing an athletic scholarship could be a long shot, it’s important to keep in mind that retirement is definitely happening,” said Luber. “It’s essential to start saving and investing early when building a retirement nest egg, so parents should consider aligning their family budgets accordingly.”
The survey showed that sports parents spend twice as much time on their children’s activities as they do on financial planning.
Research contact: @TDAmeritrade