You want to save more for college. You need to save more for college. But life gets in the way, and you forget, or end up spending your money on other things, and time keeps ticking. And here at MEFA, we get it. But we also know, many of us firsthand, how important it is to build up your college savings while you have the time. And here’s the great news: you can easily save more for college by setting up automatic deposits into your college savings account (or even increasing the amount you’re already saving regularly). Not sure you’re convinced? Here are 5 reasons to drop everything and start saving regularly for college.
1. You’re busy
If you have a college savings account, it means you have kids. Or grandkids. Or a kid in your life you care a lot about. Which means, you’re busy! You have a million other things to be thinking about as a caregiver. By automating deposits into your college savings plan, you’ve taken one item off your to-do list. You don’t have to remember to deposit part of your paycheck into your account, or transfer funds at the beginning of every month. The automation takes care of it for you. Done and done.
2. Your savings will grow
College is expensive, so you want to make sure you can save as much as possible while there’s time. And if you have young children, or even middle schoolers, time is on your side. Setting up automatic deposits into your college savings account will allow your savings to grow. Each monthly deposit will increase your total amount saved, and compound interest will provide even more savings. Set up automatic saving now to allow your account to grow as much as possible.
3. It will become part of your budget
By saving on a monthly basis, your budget will get used to that regular amount being deducted from your account. That means you’ll quickly get used to living without those extra funds, as they won’t be available to spend. It’s much easier to become adjusted to a lower amount of disposable income when it’s a permanent change, and setting up a monthly deposit will make that happen.
4. Your money will go toward your child’s future, rather than unnecessary items
If you allocate a set amount of your income toward your child’s future college costs, it means that those funds won’t be sitting around available to be spent on items you don’t really need. Often, when we don’t save regularly for college, we end up spending that money on something we could have lived without: that extra pair of jeans, more nights of takeout, or probably half the things we buy on Amazon. Would you rather spend a portion of your income to help your child earn a college degree, or use it to buy something you didn’t need in the first place?
5. Your future self will thank you
Imagine the day when your child is preparing to head off to college and you receive that first semester bill. Now imagine two scenarios: the first: you’ve saved regularly for college, and therefore have a nice nest egg ready to help you pay that college bill, and subsequent ones coming in the years ahead. The second: you didn’t save regularly, and only have a small amount sitting in your college savings account, deposited there the few times you remembered to throw a few dollars into the account. Which scenario would you prefer?
Almost every college savings account offers the ability to set up automatic deposits. If you’re saving in the U.Plan Prepaid Tuition Program, watch our short video here for instructions (skip ahead to 1:40 to get right to it). If you’re saving in the U.Fund 529 College Investing Plan, watch the quick slide show in our blog post here. And if you need any assistance, or have questions, reach out to our College Planning Team at (800) 449-MEFA (6332) or [email protected].
