Have you considered how your child will pay for college? If you’re saving for your children’s future education costs, you’re in the company of slightly half of all Americans with children under 18.
Fewer Families are Saving for College
A recent report released by college loan giant Sallie Mae shows that 48% of parents are saving for their children’s college. This number is down from the 51% of parents who were contributing to these savings a year ago.
Out of the nearly 2000 parents surveyed, nearly one-third felt overwhelmed about saving for higher education. Those families that saved have earmarked less for college than last year ($10,040 vs $13,408).
Can I share that at first I felt a bit guilty after reading this number? People are saving $10k for their children? We’re only saving a grand or two per child each year. My heart fell.
Suddenly I realized that this number regarding households across the U.S. included total college savings (not per year). Yeah sure, it’s averaged across the parents of tots and graduating seniors, but my own children are quite young and we fall on the longer end of the time frame. Is it terrible that felt instant relief when I realized my mistake?
We’ve checked and rechecked our college savings plan and we’re on track for our goals. Thinking that the rest of the country was saving $10,000 for college each year freaked me out! I suppose that I should have been excited 🙂
More Parents are Using Savings Accounts
Nearly half (48%) of the studied parents chose to use a standard savings account for their child’s college fund (up from 45% last year). This indicates a possible wariness toward job security or market swings & a desire for liquidity.
Note: the respondents may have utilized other savings vehicles as well. This figure seems to be based off of questions phrased about singular options, i.e. “Did you save using a general savings account? Yes or No. Did you use an ESA? Yes or No.” I’d love to see the number of parents that only used general savings and chose to forego all tax-efficient accounts.
Where does your family fit in this picture? Are you using tax-advantaged accounts to save for college?