Posted by Jen LynchBy Ellie Behling
In a recent report, the CSF found that parents saved less for college in 2008 than in 2007. The CSF noted that knowing how much they needed to save in the first place—which they can learn from an adviser—helped to close the financial savings gap (see “Retirement Takes Priority over Saving for College”). Also, parents who employed certain strategies, such as having a 529 college savings plan, fared better than others.
The report said 529 plans, automatic savings plans, grandparents and giving gifts of college funds versus material gifts (or “trading toys for tuition”) are all effective strategies to help parents save.
Parents who have a 529 plan have saved much more than those who don’t. In fact, more than half of parents without a 529 plan have saved nothing. Of parents with a 529 plan, 69% have saved more than $5,000. Almost half (49%) have saved more than $10,000, according to the survey data.
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