With 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. According to a new survey conducted by The Harris Poll on behalf of TD Ameritrade, youth sports expenses impact three in four (74%) American sports parents’ ability to save and invest for retirement.
Sports Parents struggle to get their financial game on
“Many parents believe investing in their children’s athletics will pay off in the form of a college scholarship, or even making it to the pros,” explained Dara Luber, senior manager of retirement at TD Ameritrade. “While children’s involvement in sports leagues can be greatly beneficial in helping to develop life skills, parents should never lose sight of saving for retirement and building a long-term financial plan for the well-being of their family.”
Parents are burning out to fund their children’s activities
Parents say a third of their income, on average, goes toward covering their children’s expenses, including sports.
• One in four (27%) spend $500 or more and about 1 in 10 (8%) spend more than $1,000 per month on their kid’s athletics.
• In order to pay for their kids’ sports expenses, parents are taking fewer vacations (36%) or working a second job (19%).
They’re investing time, as well as money.
• One in five (19%) sports parents spends 20 hours or more per week on their children’s activities, while nearly half (45%) spend only one to three hours each week on financial planning activities.
Sports expenses are impacting parents’ retirement savings – and dads are especially concerned
Sports parents today are less likely to save for retirement and maintain a budget than they were three years ago. Nearly three-quarters of sports parents say the cost of youth sports has impacted their ability to save and invest for retirement, and dads are particularly concerned about this issue.
• One in five (21%) sports parents are delaying retirement to pay for the expenses associated with youth sports.
• The number of sports parents who are very concerned about the cost of youth sports and the impact it has on their ability to save and invest for retirement has doubled since 2016, from 7% to 14%.
o One in five (19%) dads are very concerned about the impact of their kids’ athletics on their own ability to save.
Betting big on scholarships, and even going pro, as the payoff
Parents are banking on their child receiving a college athletic scholarship as payoff for the investment they have made in their child’s sports. Parents are more confident that their child will receive a college scholarship than a few years ago, though the number who report having children who actually received one has dropped by half since 2016.
• Twenty percent of sports parents are certain that their child will secure a college athletic scholarship.
• From 2016 to 2019, the number of sports parents’ children who secured an athletic scholarship has declined by more than half (24% in 2016; 11% in 2019).
• The majority of parents believe college scholarships will cover more than half of tuition, and one in 10 are optimistic their child will receive a full ride.
One in three sports parents hope their child will reach the Olympics or “go pro,” despite the very low number that actually make it to that elite level – and dads tend to be the most optimistic.
• Forty-one percent of dads expect their child to become a professional athlete.
• Five percent of sports parents’ children have reached the Olympics or gone pro as of 2019.
“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.”