College Savings Priorities: How do Massachusetts families stack up?
Which of the following is most important to you?
- Saving for your retirement
- Saving for your children's college education
- Saving for a house
If you are like most Massachusetts parents, you picked saving for retirement as your top priority. However, saving for college ranks a close second.
In our 9th year of the College Savings Indicator (CSI) Study, we continue to learn about how families in Massachusetts prioritize saving for college among other financial obligations. You may find it interesting to learn how your priorities compare to others. Here are some highlights:
- 62% of study respondents selected saving for college as one of their top 3 savings priorities
- Saving for retirement was the most popular, in the top 3 for 67% of respondents
- Saving for a house/mortgage tied with saving an emergency fund for third place, at 47%
So what's the takeaway here? First, there is no one-size-fits-all plan when it comes to saving. Families have different priorities and that's okay. The important point is that saving now gives you more options in the future. And in some cases, it will lower your costs down the road.
For example, if you save for college now, you may reduce the amount of student loans your student needs to borrow to meet the cost of education. Importantly, over the years, your college savings will earn interest over time and grow. When a student or parent borrows a loan to pay for college expenses, he or she will pay interest on the amount borrowed, which means that families not only pay the college costs, but also the additional expense of interest.
The second lesson is that your family is not alone in feeling financial pressures for a variety of reasons. Saving for college competes with many of life's financial demands, including day care, children's activities, and credit card and student loan debt. It's normal to feel a bit overwhelmed, but do not let that stop you from saving anything at all for college. Just get started - save what you can from your income and divide it among your saving priorities. Over time, you will see the money accumulate and you will be in better shape to meet your future financial needs.
If you want to learn more about saving for college, call us at (800) 449-MEFA (6332) or view our Saving for College overview here. Every little bit counts, and by saving regularly you can make sure you've made saving for college one of your top priorities.