/PRNewswire/ -- More parents of college-bound students are saving for their children's college education and trying to reduce the burden of college financing from their children's shoulders, finds The State of College Savings, the annual survey of nearly 800 parents across the country and income brackets conducted by the College Savings Foundation.
"As a result of the economic crisis of the last several years, American families are aware of the need to save more, minimize debt and increase their financial literacy. It is clear from the survey findings that parents are shifting their behavior toward greater and more consistent savings," said Peter Mazareas, Chairman of CSF, a leading nonprofit whose mission is to help American families save for their children's college education.
Sixty-five percent of parents are saving for their children's college education, up from 59 percent last year. Conversely, the number of parents who weren't saving at all has fallen to 35 percent this year, down from 41 percent in 2009.
A major survey finding was the increased importance of financial literacy education for both parents and their children. Seventy-six percent of all respondents said that they take the time to teach their children how to be financially literate. Nearly all - 90 percent - said that they believe there is a need to teach financial literacy to children as part of the school curriculum. Of those parents, 82 percent said that they believed that school districts should be required to offer a multi-grade integrated financial literacy curriculum.
As evidence of a stronger savings mindset, parents advocated for financial literacy for their children and a more conducive environment for saving for themselves: 29 percent said that it would be easier to save with "more savings awareness - our society is too revolved around spending." A new finding is that 12 percent said that they have cut back on their discretionary spending.
"A better-educated and financially literate person will avoid the excess of debt and consumption that will have long-term negative consequences on both the consumer and the nation's economy," Mazareas said.
America's college-bound children are the end beneficiaries of their parents' improved saving habits: the portion of parents who expect their children to help with college financing has dropped to 60 percent from 68 percent last year. That drop occurred among parents who expect their children to finance between zero to one-third of their college costs (38 percent this year, down from 46 percent in 2009). Those expecting their children to help finance more than one-third have stayed the same.
Nonetheless, parents' confidence in their ability to reach their college savings goals is improving, with those who are "Completely, Very or Somewhat Confident" rising to 66 percent over 56 percent last year; and those who are "Not Confident" falling to 34 percent, down from 44 percent last year.
Targeted Savings Goals and Vehicles
Among people who are saving, those who are saving specifically for college jumped 14 points to 44 percent this year, up from 30 percent last year. Interestingly, the responses for saving in General and Emergency categories stayed the same as they were in 2009.
"While people are still saving for emergencies, the focus on avoiding student loan debt through college savings has clearly reaped results," Mazareas said.
One in four of all respondents owns a 529 college savings plan, with 56 percent of those employing automatic savings plans to enable consistent savings, up from 49 percent last year.
"Not only are more people saving for college, but they think it is enough of a priority to set up automatic savings plans to do so," Mazareas added.
As in last year's survey, parents using 529 college savings plans were more successful savers than those without them. Those who utilize a 529 saved more: 20 percent have saved between $5,001 - $10,000 (as compared to 10 percent without a 529); 17 percent have saved between $10,001 and $25,000 (as compared to 6 percent without a 529), and 15 percent has saved between $25,001 - $50,000 (as compared to 4 percent without a 529). While every 529 holder had saved something, 46 percent of those who did not utilize a 529 college savings plan had saved nothing at all.
Overall, the survey showed that more parents have increased their savings. Fifteen percent said they are saving more for college this year over last, almost double the 8 percent from one year ago. Perhaps more importantly, those parents are saving significantly more: 24 percent said they were saving between 10-15 percent more than last year - up from 5 percent in 2009. And, 17 percent said they were saving between 15-20 percent more - that's up from 11 percent in 2009.
Those who are saving less dropped to 28 percent, down from 32 percent last year.
The appetite for student loans appears to be waning:
-- 62 percent anticipate using them - down from 71 percent last year.
-- As the primary financing source, student loans dipped to 42
percent down from 47 percent in 2009; but parental loans edged up
to 14 percent from 11 percent last year.
-- Parents are more realistic about the long-term commitment required to
pay back loans: 30 percent expect they or their child to be paying
back loans beyond ten years after graduation; and 69 percent beyond
five years.
Parents would like to see Administration and Congress regulate college costs:
-- 26 percent up from 19 percent last year.
The College Savings Foundation's fourth annual survey of parents, The State of College Savings, surveyed nearly 789 parents from a Zoomerang data base from across the country and income brackets ($0 - $49,999; $50,000 - $99,999; $100,000-$149,999; and > $150,000). For more information see www.collegesavingsfoundation.org.
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Showing posts with label savings. Show all posts
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Wednesday, August 25, 2010
Wednesday, May 26, 2010
Teach your children about good money management
(ARA) - Children learn the basics - math, English and science - at school. But when it comes to learning about saving and spending money wisely, the lessons begin at home.
"Helping children understand finances is very important, so that when they graduate and live on their own, they can fend for themselves and be financially secure both in their daily lives and their future," says Nick Fyntrilakis, assistant vice president of Community Responsibility for MassMutual, at Massachusetts Mutual Life Insurance Co., Springfield, Mass.
According to a National PTA article on FamilyEducation.com, "money gives people -- both young and old -- decision-making opportunities."
"Educating, motivating, and empowering children to become regular savers and investors will enable them to keep more of the money they earn and do more with the money they spend," the article says.
Here are some tips to help you educate your children about good money management:
* Help them establish a savings account.
Children accumulate money in many different ways - ranging from birthday presents to jobs they've organized like walking a neighbor's dog or mowing lawns. But putting that money into a piggy bank doesn't do anything. Explain about interest, and find a bank or credit union that offers accounts that don't charge monthly fees, don't require a minimum account balance, have good interest rates and are insured by the Federal Deposit Insurance Company (FDIC) or the National Credit Union Share Insurance Fund (NCUSIF).
* Set a budget - both for yourself and your children.
Children follow by example, and you can make a good impression by showing them how you stay within a budget - whether it's for food, utility bills or fun activities. Help your kids establish a budget, and explain the differences between needs and wants.
* Make it fun with an app.
Check out Save! The Game, a free app parents can help their children download from iTunes for a fun "needs vs. wants" game. Also, consider speaking to children about establishing a savings plan, and how much of their income they should put away for the future. This is a good time for them to plan for larger upcoming expenses like owning a car, paying college tuition or renting an apartment.
* Discuss ways your children can add to their income.
Determine if you want to establish an allowance, or encourage them to be an entrepreneur and start their own business: set up a lemonade stand, wash cars, mow lawns and rake leaves, clean garages, babysit, etc. Helping them develop a good work ethic when they're young will also help them foster excellent employment skills when they join the real world as adults.
* Encourage them to contribute back to society.
Children may have an organization close to their heart or family they want to support. Visit MassMutual's Time for Kids website (www.TimeForKids.com/RightMoney) to see how they can narrow down the list of numerous non-profit organizations in the United States to just a couple they might have an interest in.
"Talking with your children at a young age about money matters will help them establish good financial skills before they're ready to enter the world as an adult," says Fyntrilakis.
Visit MassMutual's family finance website (www.MassMutual.com/FamilyFinances) for more education tips you can pass on to your children, and for up-to-date tips and calculators for adults as well.
Courtesy of ARAcontent
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"Helping children understand finances is very important, so that when they graduate and live on their own, they can fend for themselves and be financially secure both in their daily lives and their future," says Nick Fyntrilakis, assistant vice president of Community Responsibility for MassMutual, at Massachusetts Mutual Life Insurance Co., Springfield, Mass.
According to a National PTA article on FamilyEducation.com, "money gives people -- both young and old -- decision-making opportunities."
"Educating, motivating, and empowering children to become regular savers and investors will enable them to keep more of the money they earn and do more with the money they spend," the article says.
Here are some tips to help you educate your children about good money management:
* Help them establish a savings account.
Children accumulate money in many different ways - ranging from birthday presents to jobs they've organized like walking a neighbor's dog or mowing lawns. But putting that money into a piggy bank doesn't do anything. Explain about interest, and find a bank or credit union that offers accounts that don't charge monthly fees, don't require a minimum account balance, have good interest rates and are insured by the Federal Deposit Insurance Company (FDIC) or the National Credit Union Share Insurance Fund (NCUSIF).
* Set a budget - both for yourself and your children.
Children follow by example, and you can make a good impression by showing them how you stay within a budget - whether it's for food, utility bills or fun activities. Help your kids establish a budget, and explain the differences between needs and wants.
* Make it fun with an app.
Check out Save! The Game, a free app parents can help their children download from iTunes for a fun "needs vs. wants" game. Also, consider speaking to children about establishing a savings plan, and how much of their income they should put away for the future. This is a good time for them to plan for larger upcoming expenses like owning a car, paying college tuition or renting an apartment.
* Discuss ways your children can add to their income.
Determine if you want to establish an allowance, or encourage them to be an entrepreneur and start their own business: set up a lemonade stand, wash cars, mow lawns and rake leaves, clean garages, babysit, etc. Helping them develop a good work ethic when they're young will also help them foster excellent employment skills when they join the real world as adults.
* Encourage them to contribute back to society.
Children may have an organization close to their heart or family they want to support. Visit MassMutual's Time for Kids website (www.TimeForKids.com/RightMoney) to see how they can narrow down the list of numerous non-profit organizations in the United States to just a couple they might have an interest in.
"Talking with your children at a young age about money matters will help them establish good financial skills before they're ready to enter the world as an adult," says Fyntrilakis.
Visit MassMutual's family finance website (www.MassMutual.com/FamilyFinances) for more education tips you can pass on to your children, and for up-to-date tips and calculators for adults as well.
Courtesy of ARAcontent
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Tuesday, October 14, 2008
How to Teach Your Kids Smart Holiday Shopping
(ARA) – Commercialism runs rampant during the holiday season. But all the hustle and bustle that goes along with gift giving is a great opportunity to teach children how to shop for gifts and manage their money.
“Children love giving and receiving gifts. By getting them involved in the gift buying process, you can make it a valuable learning experience, too,” says Scott Oberkrom, director of Community Investments at American Century Investments. “The best way to teach children about money is with real-life scenarios they can comprehend. Purchasing gifts for their friends is a great opportunity for them to learn.”
YesYouCanOnline.info, a Web site that helps parents teach their children good financial habits, offers the following ideas when preparing for this year’s gift giving:
The first step is to set aside money each week for a gift fund. This might be a good time for your child to set up a savings account. Depending on the balance, they might even earn a little interest. Help them learn to split their allowance or other income between fun money and savings.
If their normal allowance isn’t enough to buy gifts for everyone on their list, discuss ways they can earn extra money for their fund, such as raking leaves, babysitting or doing other neighborhood chores. You might also explain how to cut back, such as skipping weekly trips to the candy store so they can purchase a gift for their sibling instead.
As they save, sit down with your child and make a list of people with whom they would like to exchange gifts. Do they really need to give presents to their second cousins or their tent mate from summer camp? The more gifts they give the more money they need to spend. Instead of giving gifts to everyone, they can always make a homemade craft or send a holiday card.
After your child has some savings and determines who they want to give gifts to, it’s time to head to the store and do some shopping. This is a great learning moment for children to start comparison shopping. To help kids understand comparison shopping, ask these questions:
* Is this the lowest price for this item?
* Can it be negotiated?
* Are coupons or discounts available?
* Is it worth paying a little more for a gift that is environmentally friendly or supports a local merchant?
* Is the gift a worthless trinket that will break or high-quality with long term benefits?
* Does the store, in person or online, provide gift wrapping or free shipping?
* If your child’s friend doesn’t like the gift, can it be exchanged?
“By starting early and spending their own money on gifts they choose, kids really get involved in the gift giving process while learning valuable financial lessons along the way,” says Oberkrom.
Courtesy of ARAcontent
-----
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“Children love giving and receiving gifts. By getting them involved in the gift buying process, you can make it a valuable learning experience, too,” says Scott Oberkrom, director of Community Investments at American Century Investments. “The best way to teach children about money is with real-life scenarios they can comprehend. Purchasing gifts for their friends is a great opportunity for them to learn.”
YesYouCanOnline.info, a Web site that helps parents teach their children good financial habits, offers the following ideas when preparing for this year’s gift giving:
The first step is to set aside money each week for a gift fund. This might be a good time for your child to set up a savings account. Depending on the balance, they might even earn a little interest. Help them learn to split their allowance or other income between fun money and savings.
If their normal allowance isn’t enough to buy gifts for everyone on their list, discuss ways they can earn extra money for their fund, such as raking leaves, babysitting or doing other neighborhood chores. You might also explain how to cut back, such as skipping weekly trips to the candy store so they can purchase a gift for their sibling instead.
As they save, sit down with your child and make a list of people with whom they would like to exchange gifts. Do they really need to give presents to their second cousins or their tent mate from summer camp? The more gifts they give the more money they need to spend. Instead of giving gifts to everyone, they can always make a homemade craft or send a holiday card.
After your child has some savings and determines who they want to give gifts to, it’s time to head to the store and do some shopping. This is a great learning moment for children to start comparison shopping. To help kids understand comparison shopping, ask these questions:
* Is this the lowest price for this item?
* Can it be negotiated?
* Are coupons or discounts available?
* Is it worth paying a little more for a gift that is environmentally friendly or supports a local merchant?
* Is the gift a worthless trinket that will break or high-quality with long term benefits?
* Does the store, in person or online, provide gift wrapping or free shipping?
* If your child’s friend doesn’t like the gift, can it be exchanged?
“By starting early and spending their own money on gifts they choose, kids really get involved in the gift giving process while learning valuable financial lessons along the way,” says Oberkrom.
Courtesy of ARAcontent
-----
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Monday, October 6, 2008
Five Tips To Help Pay For Your Child's College Education
(NAPSI)-Skyrocketing college costs coupled with difficult economic times are prompting parents to start saving for college when their child is still quite young. According to the College Board, tuition and fees at four-year public institutions have risen nearly 51 percent over the past 10 years. Fortunately, parents can take advantage of a college funding plan that is specifically designed for their child's college education. Known as 529 plans, these programs provide federal and state tax advantages to encourage saving for higher education expenses. All earnings from 529 plans are free of federal and state income tax, and withdrawals for qualified education expenses are also free from taxes.
"By doing a little research, anyone can get started in a 529 to ensure they will have funds available when their child starts college," said Jackie Williams, spokesperson for the College Savings Plans Network. She offers the following tips to help get started:
1. Learn more about 529 plans. One way to learn more is to talk to friends and family who already participate. Another great way to learn more is through www.CollegeSavings.org, a comprehensive Web site offered by the College Savings Plans Network (CSPN). The site provides objective information about all 529 plans and offers a simple comparison feature that helps families select a plan.
2. Weigh your options. There are many 529 plans--all states, plus Washington, D.C., offer at least one plan. The comparison feature on the CSPN Web site helps families choose a plan.
3. Familiarize yourself with plan features. Did you know that 529 plans can be used to pay for tuition, room and board, fees, books, supplies and required equipment? Make sure the plan you choose offers investment options and pricing that are right for you. Remember, you are planning for a college education in the future.
4. Diversify your portfolio. A variety of investment options are available with 529 plans. Most plans offer "set it and forget it" options that over time become more conservative as your child gets older. This decreases your risk as college approaches.
5. Start early. Just like other savings accounts, the earlier you start a 529 savings plan, the more money you will have when your child is ready for college. By getting started when your child is a newborn, the gains your account earns can compound until he or she is ready for freshman year. The longer you wait, the more you limit your account's ability to grow in value. That could mean you will have to put more of your dollars into the account, paying more out-of-pocket or from loans, when it's time for college.
Getting started on your plan early can make saving for your child's future college education easier.
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"By doing a little research, anyone can get started in a 529 to ensure they will have funds available when their child starts college," said Jackie Williams, spokesperson for the College Savings Plans Network. She offers the following tips to help get started:
1. Learn more about 529 plans. One way to learn more is to talk to friends and family who already participate. Another great way to learn more is through www.CollegeSavings.org, a comprehensive Web site offered by the College Savings Plans Network (CSPN). The site provides objective information about all 529 plans and offers a simple comparison feature that helps families select a plan.
2. Weigh your options. There are many 529 plans--all states, plus Washington, D.C., offer at least one plan. The comparison feature on the CSPN Web site helps families choose a plan.
3. Familiarize yourself with plan features. Did you know that 529 plans can be used to pay for tuition, room and board, fees, books, supplies and required equipment? Make sure the plan you choose offers investment options and pricing that are right for you. Remember, you are planning for a college education in the future.
4. Diversify your portfolio. A variety of investment options are available with 529 plans. Most plans offer "set it and forget it" options that over time become more conservative as your child gets older. This decreases your risk as college approaches.
5. Start early. Just like other savings accounts, the earlier you start a 529 savings plan, the more money you will have when your child is ready for college. By getting started when your child is a newborn, the gains your account earns can compound until he or she is ready for freshman year. The longer you wait, the more you limit your account's ability to grow in value. That could mean you will have to put more of your dollars into the account, paying more out-of-pocket or from loans, when it's time for college.
Getting started on your plan early can make saving for your child's future college education easier.
-----
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