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Don’t let prom put you in poor house

For parents with teenagers in high school, monthly bills and expenses may include your son’s cellular phone bill, your daughter’s extra-curricular sports fees or even gasoline bills accumulated by the entire family. Adding to the growing pile of bills, parents of high school seniors may find themselves at the mercy of additional expenses incurred from special events, such as senior prom, graduation and more.

As parents, we want our children to have fun-filled and memorable senior years without breaking our wallets. Impossible? Not necessarily; parents can work with their teenagers to ensure fun times while actually teaching a few valuable lessons in personal financial management.

Spending by teenagers is an area of great concern to financial experts. In 2003, teenagers spent a whopping $175 billion, according to Teenage Research Unlimited. While this includes earned money, allowance, gifts and other spending money from their parents, it does not take into account the amount that parents spent as a result of their teenagers’ influences.

“Teenage spending at this level can be extremely harmful, especially with the escalation of credit card debt in the United States,” said Mike Sullivan, director of education for Take Charge America. “As the end of the 2004-2005 school year draws near, it is crucial for parents and their teenagers to talk about finances and create budgets for end-of-the-year activities. Parents with seniors need to be especially cautious because spending can easily get out of hand.”

Seniors and their parents should pay special attention to prom expenses, which can include tickets, flowers, formal wear, dinner and even special transportation. Instead of ignoring financial issues, parents should meet with their teens before students make commitments to set the guidelines that are acceptable. By establishing realistic budgets, agreeable to both parents and teens, teens can participate in the process and learn valuable personal finance skills to prepare them for the future. Parents and their teens should then create an itemized list of necessary items and the price of each to make sure that they stay within the limits of their pre-determined budget. Remember, even the little costs can add up.

Sullivan says that with early planning and budgeting, parents can save money and seniors can still have a great prom night with their friends and classmates. He offers the following tips and ideas for parents and their teens to reduce the cost of senior prom:

· Transportation. If you must rent a limousine and a driver, plan ahead and share the ride and cost with two or three other couples. Or better yet, simply borrow a friend’s or parent’s car to drive yourself and your date, paying only for the gasoline.

· Flowers. Purchase them at a local grocery store or drug store instead of a flower shop to save. Or purchase single-stemmed flowers and make your own corsage or boutonniere. Silk flowers can be purchased at craft stores and can be put together ahead of time. They can easily be coordinated with your attire and also make great souvenirs.

· Dinner. It may be included in the price of the prom ticket for some schools. However, in most cases, the dance begins at around 8 p.m. and students make reservations for dinner before they arrive at the prom. While this can be extremely expensive, dinner does not have to be at a gourmet restaurant. Call nearby restaurants to see where you can get the best deals and make reservations ahead of time.

· Tuxedos. Rent a tux for the night. Or better yet, borrow one from your older brother or a friend. Purchase the tux only if you’re going to use it again, and in the very near future. Some students shop at vintage stores for a different look.

· Dresses. Shop at outlet stores or on the Internet for a dress. Even if the dress is a size too big, it can easily be tailored to fit. Just remember, if you find a dress on the Internet, make sure you know the company’s return policies before making the purchase. Or purchase your own fabric and have a dressmaker create a personal design for you. 

· Hair and makeup. Have your mom or an aunt apply your makeup and put up your hair. Do a practice run first to decide exactly what you want. Similarly, some girls choose to have department store cosmetologists apply their makeup on the day of the prom, and best of all, it’s free.

· Photos. Bring your own camera to the prom instead of purchasing photograph packages through your school. Candid photographs can be taken to discount or drug stores for mass-printing and enlargements at reasonable cost. In many cases, you can crop photos, remove red-eye, change the color of the photo to black and white or sepia, or add captions and borders for no additional cost.

“Many seniors may feel pressured by their peers to spend a fortune on the latest trends and extravagant restaurants, expecting their parents to foot the bills,” said Sullivan. “Do the research, create a practical budget and stick to it.  While the prom may last a night, teaching your teens how to manage their money will provide a lifetime lesson.”