“Prom season spending is spiraling out of control as teens continuously try to one-up each other,” said Jason Alderman, senior director of global financial education for Visa. “It’s important to remember that the prom is a high school dance, not a wedding, and parents need to set limits in order to demonstrate financial responsibility.”
Actually, just like a wedding, it is an opportunity for parents through their kids to exploit signaling theory to communicate they are doing fine financially to members of the community. Some economists complain of similar signalling such as cars that cost more than a house, expensive clothes, and elaborate parties. I seriously doubt children, even teenagers, force their parents to buy things the parents are not willing to buy. Otherwise there would be lots more boys dying in 100+mph car wrecks because they got a muscle car. (Boy do I love to use strawmen.)
Plus, prom is a status war. This year’s people have to out spend last year’s. You want to show you are doing better than the previous year’s people. This is because prom is a replication of debutante balls. But again, I think it is the parents outspending each other not the kids.
This may be the one time it is good for me not to have children.