If you’re like me, you can’t help but love this time of year. Fall has arrived, bringing a welcome reprieve from the heat of summer; the leaves are starting to change color and back-to-school routines have finally settled down. It also marks a very important celebration: National College Savings Month.
Saving for a loved one’s college education is one of the most important and rewarding things you can do for their future. Every year, the College Savings Plans Network (CSPN) focuses on September to raise awareness about the value of planning and saving for college, and to tell as many people as we can about the benefits of investing in a loved one’s higher education goals and dreams with a 529 plan.
Currently, the total U.S. student loan debt is the second largest consumer debt category at $1.52 trillion – second only behind mortgage debt. This is an overwhelming burden for students to bear and one that we should all work to help lessen for future generations. With every year that passes, I’m delighted to see more parents make the decision to save for education with 529 plans. In the first six months of 2018, total assets in 529 plans around the country grew by $9.8 billion dollars. With 13.6 million accounts open and a record average account size of $24,153, families are clearly prioritizing financial planning for higher education.
It can be difficult to consider putting money away today for something that might seem far off in the future, but starting to save now — even a small amount — will reduce the burden of college expenses on your family when the time comes to send your child off to college.
For families who already have a 529 account, now is the perfect time of year to reassess your saving habits and consider increasing your contributions, or contributing on a more regular basis. If you haven’t already opened a 529 account, it’s never too late to start saving. The earlier you begin putting money aside, the more you can spread out contributions and allow your funds ample time to grow. I always say, a dollar saved is a dollar that you don’t need to borrow down the line!
About the Author
Jim DiUlio is Chair of the College Savings Plans Network and Director of the Wisconsin 529 College Savings Program. He is also the investment officer for the state’s direct-sold Edvest plan, and the Tomorrow’s Scholar plan, available through financial advisors and fee-only planners.