Monthly Archives: March 2017

Know More About College Fund

And yet, when it comes to socking away for future tuition, fewer than half of all parents are making the grade.

A new study by Sallie Mae reveals that just 48% of moms and dads are actively contributing to their kids’ college funds.

This stat is a new low for Sallie Mae’s annual survey, which saw a peak of 62% of parents saving in 2009. By 2013, the percentage of parents socking away for tuition had dipped to just 50%.
What’s more, those college caches are looking leaner than ever.

The average amount saved is now just $10,040, a significant 25% decrease from the $13,408 socked away in 2014—and the lowest amount in five years.

Curiously, despite their lack of sackings, the study found that nine out of 10 parents do believe that building a college fund is an important investment in their child’s future.

So what’s stopping them from socking away?

Not surprisingly, 61% of parents cited lack of resources as the number one reason for their savings shortfall. But almost two-thirds also said they believe their kid will score enough in scholarships to cover college costs.

And even those parents who are saving are making a few key mistakes as well, Sallie Mae found. Most significantly, just 27% are taking advantage of tax-favored 529 plans—nearly half are simply socking away for college in general accounts.

Still, there was some good news on the savings front: the study also found that many parents are working on building better money habits. For example, 41% of moms and dads are now using an auto-deposit service to make the savings process routine. Plus, 31% set aside a certain amount from their paychecks for college—up from 26% in the past year.

Know more About Money Confidence Killer

Overall, financial confidence seems to be finally making a comeback.

After all, whether you’re looking at increased savings among Millennials, fuzzier feelings toward retirement or even soaring credit scores, the news shows some pretty sunny stats.

And numbers from the latest COUNTRY Financial Security Index now only help to back up this sentiment—to a certain extent.

The index, which measures Americans’ overall attitudes toward their money, jumped 2.1 points this year to 66.9—a record high since the Great Recession.

Of the survey participants, half reported that their overall level of financial security was good or excellent. Even better, about four out of five said their finances were on track to stabilize or even become better in the future.

That’s thanks to a number of improving benchmarks: 78% now feel they can pay off their debts as bills come due, 50% are setting aside money for savings, and 58% believe they’re on track for a comfortable retirement.

But there is one area where all that optimism comes to a dead halt: the ability to finance the ballooning costs of college.

In fact, the index found that a mere 18% of Americans feel confident they have enough funds to send their students to college—a stat that actually fell 12% during just the first half of 2015.

And with the average graduate leaving with more than $35,000 in debt, it’s no surprise that only 37% of Millennials feel confident they can pay back those student loans as they come due.

Learn More About Super Saver

It seems like every time the words “Millennials” and “money” appear in the news, they’re connected by a phrase like  … “don’t have any.”

But new research paints a slightly sunnier picture of young adults’ finances, giving us reason to believe that they’re actually more stable than many others.

We know: It sounds implausible. But the eighth annual America Saves Week survey, conducted by the Consumer Federation of America, suggests that Millennials are saving more than almost any other generation.

According to the survey, 56% of people ages 18 to 34 are socking away at least 5% of their income, compared to 52% of the general population. Young adults also showed significant improvement in their savings rates—in 2014, just 50% of them were saving at least 5%.

Millennials are making progress on other financial fronts, too. Nearly two-thirds have an emergency fund to cover unexpected expenses, compared to just 53% last year.

What’s more, the portion of Millennials who have savings plans increased from 43% to 47% since 2014. That’s especially important, given that the survey found those with financial plans are more likely to hit their money goals.

So what’s driving Millennials’ positive financial behavior? While this survey didn’t look specifically at people’s motivation for saving, other research suggests that Millennials learned key lessons from the recent recession, like the idea that it’s important to save now to prevent future financial disaster.