Money Mistakes: Not Enough Saved For College

BOSTON (CBS) – All last week we discussed ways to save for college. And some listeners admitted to being in a sorry state. They had not saved enough or anything in some cases so what should they do. And then there were the parents whose kiddo was now 30 and they were still paying off the school loans.

If your kiddo is in high school you may not have much time to fix this money mistake.

You have thought about college costs since the kid was born. But you wake up one day and realize she’s 16 and a starting forward on the high school soccer team.

According to Sallie Mae’s How America Saves for College 2016 study, 57% of families are currently saving for college.

And according to Fidelity’s College Savings Study, 72% of parents have started saving. Many investing in 529 plans. This is all good news, but Fidelity found most folks are not saving enough. Many folks in the Fidelity study who had a student in 10 grade or higher did say they could have saved $50 to $100 a month more. So look for small ways to save an additional $50 a month.

Another way to save some extra dollars for college is by using Upromise. A company that provides a free-to-join loyalty program, where members accrue credits on eligible purchases that are directed to a college savings account, a 529 plan or to pay down student loans.

I have been enrolled in the Upromsie plan since my granddaughter was a couple of months old. She’s now eleven and every time the account reaches $200 I withdraw the money and deposit it in her 529 plan at Fidelity. My hope is these dollars will help with the cost of books when she starts college in 7 years.

Another regret I have heard from parents of college bound kids is that they borrowed from their retirement plans. One man told of having nothing for kiddo #2 and another told of losing her job and had to pay taxes and a 10% penalty on the money she borrowed for she couldn’t pay it back.

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You can hear Dee Lee’s expert financial advice on WBZ NewsRadio 1030 each weekday at 1:55 p.m. and 3:55 p.m.

Subscribe to Dee’s Money Matters newsletter here.

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