May 5, 2015 12:33 am
What’s more, those who have established a college fund are saving less than they did in past years, with the average annual amount falling to just $10,040.
Increases in the cost of living and unexpected expenses were the most commonly cited reasons for saving less.
Despite these findings, habits are changing for the better. More parents saving for college are using auto-deposit services, designating a portion of each paycheck to a college savings fund, reducing personal and household spending and using cash-back rewards programs tied to college savings accounts.
According to Sallie Mae, a little preparation can mean big savings in the long run. Parents who build a plan to save for college have saved $11,102; parents who do not have plans saved just $7,611.
To boost your saving efforts, Sallie Mae recommends the following:
1. Open a savings account. Set up and designate a savings account as your college fund. Deposit gifts from friends and family, and sign up for free services that let you earn cash back to save for college.
2. Make regular contributions. Set a goal, and create a routine of adding money. Even a little bit adds up over time, and automatic deposits make saving easy.
3. Explore tax-advantaged options. Put your money to work using dedicated college savings programs like Coverdell Education Savings Accounts, prepaid state college savings plans, and 529 college savings plans.
Source: Sallie Mae
Published with permission from RISMedia.