5 Key Points
- Athletic scholarships are rare. Very few high school athletes receive scholarships, and full-ride scholarships are even rarer.
- Scholarships are not guaranteed. Injuries, performance, and eligibility issues can lead to scholarships being lost, even after the student is in college.
- Club sports are expensive. Fees, equipment, tournaments, and travel quickly balloon the costs associated with club participation.
- College savings plans offer reliable growth. 529 plans provide tax advantages and steady returns, creating a more robust financial foundation for your child's future.
- Balance is key. Team sports offer valuable benefits, but it's vital to weigh the costs against potential scholarships and consider the financial priorities for your family's future.
Club Sports: The Scholarship Dream vs. Financial Reality
As a parent, you want nothing more than to see your child thrive. Their passions become yours, and you'd move mountains to give them the best opportunities. Nowhere is this more evident than in the world of youth sports. When your child finds a sport they love, the allure of club and travel teams is undeniable. The promise of higher competition and limitless growth can be intoxicating; in fact, I decided to write this post after attempting to figure out my daughter's complex summer lacrosse tournament schedule!Club organizations understand this parental drive and often take advantage of it. They often paint their programs as more than helping them reach their athletic potential, they are the golden ticket to college scholarships. But is sinking thousands of dollars into these programs a sound investment, or are there wiser ways to invest your money in your child?
The Benefits of Sports
Undeniably, participating in sports has tremendous benefits for children's development. The lessons learned in teamwork, discipline, perseverance, and handling both victory and defeat are invaluable life skills. Studies show that participation in sports can improve academic outcomes and overall well-being.However, parents must ask themselves – do the potential benefits justify the sky-high expense? Community-based teams, school sports programs, and individual athletic endeavors offer many of the same benefits at a much lower cost. However, many club teams help sell the team's value by mentioning the athletes from their club who have received scholarships and offering recruiting services.
The High Cost of Competition
It's no secret that club sports carry a hefty price tag. In my own family, I have two daughters deeply involved in sports. One plays soccer, lacrosse, swims, and plays field hockey. The other is a dedicated gymnast. Together, their annual sports expenses exceed $10,000, and that's without factoring in travel for out-of-town tournaments.Breakdown of typical club fees:
- Registration: Seasonal fees can range from several hundred to a few thousand dollars.
- Uniforms and Equipment: Sports-specific gear and mandated team apparel adds up quickly.
- Coaching and Training: Specialized coaches and trainers demand higher hourly rates.
- Tournaments: Tournament fees can be hundreds of dollars per event, on top of travel expenses.
- Travel: Hotels, gas, and food for tournaments significantly increase costs.
These costs can quickly add up and eat into money earmarked for other goals.
The Elusive Scholarship
The dream of a full-ride athletic scholarship is the ultimate justification for many parents making huge sacrifices for club sports. However, the NCAA data tells a different story:
- NCAA Athletic Scholarships: Across all NCAA sports and divisions, only about 2% of high school athletes receive any athletic scholarship money.
- Full-Ride Scholarships: An even smaller fraction, roughly half of that 2%, receive the coveted full-ride scholarship.
The odds are drastically lower for sports outside the primary revenue-generating ones – football and basketball.
Scholarships Aren't Set in Stone
Even if your child receives an elusive scholarship, parents and athletes need to understand they are not secure. An athletic scholarship is not for the duration of your child's education; it is a one-year deal. Things you understand about scholarships include:
- Verbal Commitments Don't Count: Early verbal agreements with coaches are not binding. Until you sign the official documents, there's no guarantee of a roster spot or scholarship money.
- Injuries Can Change Everything: If you are injured, even outside of official practice or games, your scholarship might be at risk depending on your school's policy.
- Yearly Contracts: Many athletic scholarships are year-to-year agreements. Coaches can choose not to renew them due to poor performance, a change in coaching staff, disciplinary issues, or simply to offer it to a different athlete.
- Eligibility is Key: If your academics suffer or you get into trouble, your eligibility to compete is jeopardized, putting your scholarship in danger as well.
It's crucial to read all scholarship agreements carefully and understand the conditions under which your financial aid can be revoked.
A Smarter Investment: The Power of a 529 Plan
Imagine that instead of channeling $5,000 annually per child into select club sports, your child participated in school/township sports, and you redirected the select club money into a 529 college savings plan. Assuming an average 8% annual return and starting contributions at the age of 8 (you should aim to start earlier but I'm focusing on club sport ages), here's a breakdown of how much your child could have by the time they reach 18:
By age 18, your child could have $89,885 saved – a substantial contribution toward their college education, without the gamble of a highly improbable scholarship. Again, I'll note that the $5,000 per child my children spend is on the low end for most parents I talk to—it could quickly increase as they get older.
Finding the Right Balance
The decision to invest in club sports is deeply personal. There's no one-size-fits-all answer. Here are some factors to consider:
- Your Child's Talent and Dedication: Are they demonstrating exceptional skill and a deep love for the sport that might suggest a true path to a scholarship?
- Your Family's Financial Situation: Can you afford the costs without undue financial strain? If you have money to comfortably cover sports, college, and, most importantly, your retirement, spending now may well be the best use of your money.
- Alternative Options: Are there high-quality, more affordable sports programs in your community?
- Financial Priorities: Does funding your child's education take a higher priority?
Trade-Offs
While team sports undoubtedly offer children fantastic opportunities for growth, parents must carefully weigh the costs against the extremely low probability of athletic scholarships. Investing steadily in a 529 college savings plan is a more financially responsible strategy to secure your child's long-term future. Ultimately, fostering a love of sports, encouraging healthy competition, and promoting a balanced lifestyle should be the primary goals, regardless of the intensity level at which they participate.
Feel free to let me know your thoughts at the next all-weekend lacrosse tournament...
Contact Purpose Built Financial Services today to ensure you can afford club sports, retirement, and schedule a comprehensive financial planning consultation.Your financial well-being is too important to leave to chance. Choose wisely.
FAQ
Q: Are club sports the only path to college scholarships?
A: No, college scholarships can be obtained through various avenues, including academic achievements, other extracurricular activities, and less competitive school sports programs.
Q: How often are athletic scholarships fully renewed?
A: Athletic scholarships are typically renewed annually and are not guaranteed year-to-year. Their renewal can depend on the athlete's performance, health, and adherence to academic standards.
Q: Can investing in a 529 plan offer a better return than club sports for college funding?
A: Yes, investing in a 529 plan provides a more predictable and stable return compared to the uncertain prospects of securing an athletic scholarship through expensive club sports.
Q: What should parents consider before enrolling their child in club sports?
A: Parents should consider their child's passion and skill level in the sport, the family's ability to afford high costs, alternative sports options, and the overall impact on the family's financial goals, including retirement and education funding.
Q: What are the risks of relying on athletic scholarships for college funding?
A: Relying on athletic scholarships is risky due to their non-permanent nature, dependency on the athlete's ongoing performance and fitness, and the low probability of receiving them in the first place.
About the Author
Sean Lovison, CPA, CFP®, is a flat fee-only financial planner based in Moorestown, New Jersey, serving clients virtually nationwide. After spending 14 years as a corporate chief financial officer (CFO), receiving and designing compensation plans, he decided to help others navigate their plans.
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