$16.6 billion. That’s what parents will shell out this year to keep their kids occupied (and out of trouble) during the traditional summer hiatus from school. If you assume the break generally lasts three months, it works out to more than $5.5 billion a month.
According to a recent survey by American Express, the average family will spend $601 per child during summer break for things such as childcare and babysitting, day and sleep-away camps, participation in sports, learning activities, etc....
Affluent households--defined as those with annual income of at least $100,000--will spend nearly twice as much: $1,116 per child. “The highest number cited among affluents for day camp was $2,600,” says Melanie Backs, public affairs manager at AMEX.
The cost of summer camp also differs based on location: If you live in the Northeast or other parts of the country where the cost of living is higher than the national average, expect the cost of your child’s summer vacation to be higher, as well.
According to Backs, the amount parents spend on their children during school vacation “shows that Americans are interested in keep their kids not just busy and happy, but engaged.” This includes providing opportunities for learning as well as physical activities. Here are the top five costs:
Frankly, these numbers surprise me. I expected that “day camp,” which includes babysitting services, would consume the bulk of budgets. But many parents are planning to spend nearly as much to take their kids to places like Six Flags and Disney World!
Keep in mind that the $208 cost above is per child. If you’ve three kids and make less than $100,000 year, you’re likely to spend $632 on “day trips.” In addition, you need to factor in the cost of one or both parents accompanying the children.
Don’t get me wrong, I think theme parks can be a lot of fun. But are they necessary? With unemployment stubbornly high and income growth stagnant, it seems to me we might have our priorities upside down. Or perhaps we don’t really realize about how quickly the cost of admission, food and souvenirs add up.
It’s easy to get guilted into spending more than you can afford; some of the most skillful manipulators I know are less than three feet tall! But as Backs points out, “If you’re watching your budget, it’s important to think about not spending beyond your means. Instead of going to theme parks five times, maybe you just go once.”
At the very least, parents should come up with a plan for what they’re going to spend on their kids until classes resume in the fall well before the school year ends. This ought to be incorporated into your annual budget and not some expense that ambushes you in mid-August when you suddenly realize you’ve blown the “back-to-school” spending account.
Backs points out that this three-month summer school break isn't mimicked around the world. "If you live in Australia, the school calendar is year-round. You get a much shorter summer vacation.” In fact, many educators argue that three months is too long because kids forget a lot of what they learned and it takes weeks to get them back into learning mode when school starts up again.
So why do we have it? Credit the good old days. When our economy was based mainly on agriculture, farmers argued that the children were needed to help bring in the summer harvest. I’m not suggesting we go back to this, but if the school year lasted a little longer, I’d bet a lot of parents would celebrate. And so would their bank accounts.
Ms. Buckner is a Retirement and Financial Planning Specialist and an instructor in Franklin Templeton Investments' global Academy. The views expressed in this article are only those of Ms. Buckner or the individual commentator identified therein, and are not necessarily the views of Franklin Templeton Investments, which has not reviewed, and is not responsible for, the content.
If you have a question for Gail Buckner and the Your $ Matters column, send them to: email@example.com, along with your name and phone number.