Saving Money on Extracurricular Activities
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What is the main topic discussed in this episode?
This episode is brought to you by Charles Schwab. Decisions made in Washington can affect your portfolio every day. Washington Wise from Charles Schwab is an original podcast that unpacks the stories making news in Washington. Listen at schwab.com slash Washington Wise.
Here's your money briefing for Friday, August 25th. I'm Ariana Asparu from The Wall Street Journal, filling in for J.R. Whelan. The after-school 3 p.m. pickup isn't the end of the day for many students. Now, more parents are opening up their schedules and their checkbooks for extracurriculars.
Why are parents spending more on extracurriculars now?
The end goal is, of course, to expose kids to new activities, get them to come out of their shell, and even get them to dive into something that they're interested in. But the majority of parents who do put their kids in these extracurriculars do hope for some kind of return of investment.
We'll speak to Wall Street Journal personal finance reporter Oyin Adedoyin after the break.
With back-to-school season in full swing, parents are spending big on music lessons, sports, and other after-school activities.
How have college admissions changes increased pressure on nonacademic activities?
Oyin Adedoyin from the Wall Street Journal's personal finance team joins us. So, Oyin, growing up, lots of us played a sport or took some piano classes after school, even going into high school. And extracurriculars have always played a role in things like college admissions. So why are they becoming more important now?
It's a combination of things. For one, standardized test scores like the SATs and the ACTs are carrying a lot less weight in the college application process now. And college admissions consultants are saying that the Supreme Court's June decision to outlaw affirmative action may put even more pressure on non-academic activities like those extracurriculars you were talking about, including skills and sports.
How much are families actually spending on after‑school activities?
Even after-school programs that are usually more affordable have also been having trouble even keeping up with the demand in recent years. And that's leaving a lot of kids out. How much are families spending on them? According to a recent survey from LendingTree, families are spending upwards of $700 per kid on extracurriculars a year. But that's even on the low end for some families that are employing private coaches or even shelling out for lessons and competitive travel teams as well.
So $700 per child per year is on the lower end.
Yeah.
And if you have multiple kids?
Which activities are seeing the biggest increases and why are kids starting younger?
It can get even more expensive, even, you know, well into the thousands.
Thousands per year. Wow. So what types of activities are seeing this increase in spending?
Competitive sports like cheerleading, fencing, and even golf and soccer are seeing increases in the number of kids that are involved. And those kids are starting at younger ages. We're also seeing this in the arts. Parents are paying more money for private art coaches or guitar lessons. And this is something that increased a lot following the pandemic.
And it seems like it's limited based on what time and money a family can set aside for this, right?
What budgeting and cost‑saving strategies do financial planners recommend?
Financial advisors told me that while this is something we've always seen in more affluent families, other families that are more middle or low income are blowing their budgets on this and they're even going into debt. In a recent study of about 6 million college applications from researchers at the University of Maryland, it showed that wealthier students and private school students, as well as white and Asian American students, reported more extracurricular activities and more awards, as well as more top leadership positions in those activities. So that shows that these are students that have been well involved in things over time. What are some of the benefits that parents are hoping for here?
The end goal is, of course, to expose kids to new activities, get them to come out of their shell, and even get them to dive into something that they're interested in. But the majority of parents who do put their kids in these extracurriculars do hope for some kind of return of investment, whether that means their kid gets an elite college scholarship or they get some kind of career opportunity out of this.
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Chapters
7 chapters
1
What is the main topic discussed in this episode?
0:00–0:36
2
Why are parents spending more on extracurriculars now?
0:36–1:36
3
How have college admissions changes increased pressure on nonacademic activities?
1:36–2:18
4
How much are families actually spending on after‑school activities?
2:18–2:52
5
Which activities are seeing the biggest increases and why are kids starting younger?
2:52–3:27
6
What budgeting and cost‑saving strategies do financial planners recommend?
3:27–4:58
7
What are parents hoping to gain from extracurriculars and are they always necessary?
4:58–6:52
Speakers
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