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Like home renovations, competitive sports almost always cost more than anticipated, says an advisor.miljko/AFP/Getty Images

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A child making a competitive sports team is the sort of milestone that can create excitement among parents. But that enthusiasm can turn into anxiety after learning about the financial commitment.

Advisors have a role to play in helping families revise their budgets so they can afford the newfound expense.

“Every parent wants to hear their child is gifted enough to participate at a competitive level,” says Shelly Appleton-Benko, vice president, director and portfolio manager at Odlum Brown Ltd. in Vancouver. “But it’s a huge decision from both a time commitment and financial perspective.”

Ms. Appleton-Benko has personal experience with competitive sports as her daughter participated in figure skating at a national level. The first question, she says, is making sure competing is something the child actually wants to do and they understand the commitment level. She found the money discussion often came much later in the process, well after the family had figured out a schedule with school, carpooling, and made the initial payment.

“At first, you don’t really realize it’s not just about association fees,” she says. “I had no idea how much figure skating costs at the time. No one gave me a heads up.”

The coaching fees, in particular, threw her off guard, as sometimes she paid $700 a month, other times she could pay as much as $1,500 a month, depending on how quickly her daughter progressed through her levels. If her daughter travelled to a competition, for example, the skater’s family paid even more coaching fees in addition to their kids’ travel costs.

Both of her kids had strength and conditioning classes, tournament fees and special equipment. “The list just goes on and on,” she says.

Always ‘leave a buffer’

Elke Rubach, principal at Rubach Wealth Holistic Family Advisors in Toronto, likes to have her clients plan for contingencies. Like home renovations, she notes competitive sports almost always cost more than anticipated.

When Ms. Rubach’s daughter competed in gymnastics, she was aghast at all the mandatory line items that kept cropping up – such as four different types of leotards, different gloves and stretching therapy classes. She uses her own experience to best advise clients in this situation.

“I always like to leave a buffer for my clients. I’d rather underpromise and overdeliver than have them go over budget,” she says.

Ms. Rubach also helps them consider whether it’s worth the financial effort and commitment to chauffeur kids out of town every weekend for tournaments, for instance.

“Sometimes they’ll say yes, but often as they continue [with competitive sports], sometimes they’ll say ‘this is the last year we’re doing it,’” she says.

Buying used equipment and skipping vacations

Cathie Hurlburt, senior financial planner at Assante Financial Management Ltd. in Vancouver, had a daughter in ski racing. While she paid for the first race suit, after that, she relied on a network of high-end, used equipment. She says the club regularly had swap days and buy and sells to help keep equipment and clothing more affordable for families.

She also noticed how most ski families watched their money carefully. They brown-bagged lunches and brought coffee in a Thermos instead of buying at the ski club or on the road.

“Spending $6 on a coffee doesn’t seem like a big deal but if you do that eight times a month, that’s nearly $50,” she says. “You just have to be a little more organized and deliberate about where you spend your money.”

Some advice she gives clients going through the rep sports world is not to get caught up in what everyone else is doing and to work on cash-flow management.

“Many families lack the financial discipline needed to make it work,” she says. “They throw the expense on a line of credit or even worse their mortgage. They don’t want to face the cash flow because it’s scary.”

Ms. Hurlburt gets down to the nitty-gritty and examines every line item. For example, if a client has budgeted $2,500 for their children’s extracurriculars but it’s now going to be an extra $5,000 due to one child making a competitive team, they need to find that money somehow.

She’ll ask them if they plan to skip the big vacation to afford it as the family will now be spending vacation time at tournaments or competitions. The key thing is looking at specific, tangible ways to afford the cost, she says.

In high-net-worth circles, Ms. Hurlburt says a family may see other families travelling to exotic locales, cottaging and spending money on high-end sports for their kids. But she notes that the reality is more nuanced than that. It’s all about priorities and values, and rarely are they the same.

One family may value paying for hockey for three kids and forgo any vacation to afford it, she says. Another family may travel extensively but not have their kids in expensive extracurricular activities.

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