Saving for college is something that affects people all over the country and across age groups. A recent report by The Education Data Initiative found that as the cost of a college education rises, so too is the amount that Americans are saving for college.
On average, parents save over $5100 for their child’s college per year. The report found that the average American wants to save $57,981 for their child’s college expenses. The report also found that Americans generally only put 40 percent of their college savings into specific college savings accounts.
Not everyone has the same idea when it comes to saving and no two people are alike. Everyone has their own individual set of circumstances both financially and socially. The most common form of paying for college is to save money over time. The research found that 75 percent of Americans do this. Setting money aside for college takes time and diligent effort. Savings don’t happen overnight and so you have to be constantly making sure that you are contributing to your savings. As the cost of living goes up, everything gets more expensive, including college.
The way in which Americans save is rather diverse.
22 percent of families in the USA pay for college using life insurance.
14 percent of families plan to pay for college by paying off their mortgage and freeing up both equity and disposable income.
“Being able to provide your child with a college education will set them up for a better life in the future”, says Richard Eden Senior Vice President of David Lerner Associates, “The way you save to do this is up to you and there are a number of options out there for you to explore. Make sure you get professional advice and work out what your goals are so that you can set a financial plan in place to achieve them.”
529 plans are very popular. The largest majority (30 percent) of College savings accounts in America are 529 plans. Americans have saved an average of $30,287 in the 529 plans. Only 4 percent expect to save money for paying for college by applying for scholarships for their kid.
Saving for college is part of the American lifestyle and has to be taken into account when considering your future financial plans. If you need to say for college then you should start thinking about it today and get as much information as you can about the correct plan for you.
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