The High Price of Youth Sports And The Increasing Student Loan Crisis

This is a topic that I am very familiar with at a personal level. As the father of three girls, I am at daily odds with the onslaught of youth activities that compete for not only my families money but my families time. It is the world of youth sports and I wanted to use this post as an opportunity to shed some light on what I feel is a very troubling trend in American society. This trend sees us spending more and more of our time and money on youth sports that often times have very little financial return.  There are those that would argue my position on this as they attach emotionally to their own time and investment in these programs and use this as justifications for their expenses. I want to make it quite clear that I am not arguing against the fact that it is fulfilling for kids. I am not arguing against the fact that these activities build sportsmanship and team building amongst our youth. These are all great things and I am a HUGE proponent of these sorts of activities, just not to the scale, they have become. What I want to really look at are the statistics.

According to this Article,  20% of American Households spend over $12,000 a year on youth sports. That is roughly $1000 a month for our kids to play competitive sports. This includes sign up fees, team fees, uniform fees, travel fees and more. It also states that “60% say they worry that paying for sports may impact their ability to save for retirement.” This means that not only are parents not paying for their own retirement but they also aren’t putting money away to help children go to college.

Some parents justify this spending by stating that it will give their children the opportunity to compete at a high level and thus will allow them to get a scholarship to pay for college. Let’s look at the statistics on that one. According to the NCAA website, Division I and II schools, the only ones that are allowed to give scholarships for sports, only gave out 150,000 scholarships last year. That is roughly 2% of all high school athletes. That means if your kid is going to a school where sports is huge and there are over 200 kids competing in sports at that school only 4 will actually have money given to them by a college to play sports. That’s a two percent chance that your sports indoctrinated child will have money to help pay for college.

Let’s look at some other numbers. Say you are an average American family with two kids in competitive sports and you are spending $400 a month per child on competitive youth sports. Over a 1 year period that is $3,600. Say a child starts at age 5, which is not unheard of now, that parent will have invested over $50,000 between age 5 and 18 when they would normally enter college. If this same parent had taken half of that money, $200, and invested that money in a 529 savings account for their child over the 14 year period with a 7% yearly return, they would have over $56,807 for that child to use towards college-related expenses.

The youth sports industry generated over 9 billion in profits in 2015. The student debt crisis hit $1.5 Trillion in 2017. These two statistics alone should tell us that we should really take a hard look at this wealth building institutions and ask ourselves, Are we paying for immediate gratification now and setting our children up for a lifetime of debt and underachieve by participating in these out of control youth programs? This is the question? Where will you and your family end up at the end of your journey?

 

https://www.usatoday.com/story/money/2017/09/05/why-families-stretch-their-budgets-high-priced-youth-sports/571945001/

http://www.ncaa.org/student-athletes/future/scholarships

https://www.savingforcollege.com/intro-to-529s/what-is-a-529-plan

 

 

 

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