There are a number of ways that Americans try to better prepare themselves for the future, and this not only includes a financial strategy for retirement, but also other expenses for their families. Saving for a child’s college education is popular among many people, and this may be on the rise.
More than half of American parents explained that they are saving money for their children to go to college, according to a report conducted by Ipsos for Sallie Mae. This figure was comparable to the amount of parents who planned on doing this last year.
However, the amount being saved is growing significantly. The report explained that this year, parents are looking to save approximately $3,398, on average. The figure was 29 percent higher than the amount recorded in 2013.
Having a specific strategy on how to factor college savings into a personal finance plan may help some people. The report showed that 40 percent of parents that do have a plan will generate the money through income and savings channels. For those adults who don’t have something set up, 23 percent said they would pay for their kids’ college expenses out of pocket.
More families focus on college
At the beginning of the year, many adults were looking for ways to help their children out when they eventually head off to college. According to a report from Fidelity Investments, 85 percent of adults with children felt that saving for their higher education expenses was a top-three priority. Another 34 percent explained that it was the main focus of their savings this year.
“For many parents, saving for college is an area of focus throughout the year, but the New Year is an ideal time for families to reassess their finances, set new savings goals and priorities, and establish a college savings plan,” said Keith Bernhardt, vice president of college planning at Fidelity. “While many resolutions are quickly abandoned because they aren’t as specific and attainable as they could be, we are encouraged that families are setting concrete college savings goals, and developing actionable plans that will help them keep these resolutions.”
More than four-fifths of those polled wanted to save every month for their children’s college expenses, the report added. Nearly 40 percent noted that they would put the money aside that their children receive during holidays.