16 Sep, 2008
September is National College (Automatic) Savings Month
Posted by: Jonah In: College Savings
If you’re a savvy college saver you probably know September is National College Savings Month.
At the risk of forever ruining a cliche running on VERY bald tires, “every month is college savings month.” That’s because an automatic recurring monthly investment is the best way to capitalize on the years that lie between your child’s arrival and their matriculation as a newly-fledged college freshman.
Automatic Savings = Freedom From Debt
If you’re not putting something, anything into your child(ren)’s college fund each month, I implore you to start. Kick it off with a $100 at birth and save $25 per month and you’ll likely have around $12,500 saved by your child’s Freshman year.
The average college student graduates with around $19,000 in student debt, but if you’re on the automatic investment plan, you’ll be giving that number a 66% haircut. With a lower debt balance, your child can pay down their debt faster to reduce interest. Even with a normal 10-year repayment plan, and a 50/50 mix of private and government debt, your savings take the total payments for your child from over $31,000 to around $10,800, that’s over $20,000, or $2,000 per year to take additional classes, explore an alternative career, or come home to visit more often.
Whichever way you slice it, the gift of reduced debt is one with the potential to profoundly broaden the horizons of your child as a young adult, and at just $25/month it comes at a truly minimal cost to you. So I hope you’ll join me (my first little one arrives in only 6 weeks!) in making this the month you get started with an automatic savings that’s pain-free and perfect for the Future Freshman in your life.
Empty