The list of prom essentials seems endless -- young ladies need the perfect dress, a glamorous hairdo, flawless makeup, matching shoes and evening bag. Young men need a suit, shoes and a corsage for their date. Don't forget about prom tickets, dinner and transportation to the dance. According to a recent study by Visa, the average American family will spend $978 on their teen's prom, which is 14 percent less than the average in 2013. Don't worry if that amount seems well over your family's budget, as there are many ways that you can reduce costs and teach your kid about the value of money in the process.

"It is important that whatever you spend for your teen's prom fits within your budget," says Nat Sillin, Head of U.S. Financial Education at Visa. "Prom is just a dance and is not worth going into debt for."

Set a budget with your teen

Instead of telling your teen how much they can spend, sit down together and work out a budget together.

"Prom is one of those events before teens go off to college or off on their own to the workforce, and learning how to set a budget and track your budget and stick to it is a critical skill that everyone needs as they go from a teen to a young adult," says Sillin.

He suggests families use Visa's free Plan'it Prom app to create and stick to a budget.

"The app has a social sharing capability, so teens as they go through their budgeting and planning process can take photos of the dress that they picked out or the corsage that they are interested in and share them with their friends," Sillin says.

Check for special offers through your credit cards

Many credit cards offer special discounts or deals when you use the card at specific stores, including shoe stores, department stores and restaurants. While emails and fliers are sometimes sent about the offers, Liz Weston, personal finance expert and author of "Deal with Your Debt: Free Yourself from What You Owe," says that the deals are often unadvertised, and you have to search for them.

"Log onto your credit card website to see if there are any offers specifically available for you as well as those available to any card holder," Weston says.

Use orphaned credit card rewards points

While travel rewards get you the most value from credit card rewards points, gift cards are a better choice than merchandise. Weston says that many people have credit cards with a small number of rewards points that they have forgotten about. Look at all of the cards that are currently in your wallet, even those you are not currently using.

"Check to see if you can use the orphaned points to purchase gift cards for a store or restaurant related to prom," Weston says.

Borrow or buy secondhand when possible

One of the best ways to save money is to stay away from the mall. Often it is the smaller items that add up to break the budget. Andrea Woroch, a nationally recognized consumer and money saving expert, recommendations asking if your daughter could borrow a necklace, shoes and purse to match her dress. Your son might be able to wear his older brother's dress shoes to the dance. Before heading to the mall or boutique, take your daughter to a consignment store to see if she falls in love with a gently worn gown or a funky, one-of-a-kind vintage dress. Instead of renting a limo, consider borrowing the family car or a family member's luxury car for the night.

Consider doing it yourself

Instead of positioning it as saving money, Woroch suggests hosting a hair and makeup party for your daughter's friends. Buy some fun products, serve snacks and let them save money without even realizing it. And they will have a lot more fun getting ready for the night with their friends. Since dinner at a fancy restaurant can be a large expense, consider creating a restaurant-like atmosphere in your home and cooking dinner for several couples.

Featured Partner Cards