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20 Signs Mom Is Not Saving Enough For Her Kid's Education

What mom doesn’t daydream of her child one day leaving the nest and going off to college to experience the world, hopefully, get an education and land a top-paying job? That’s the plan in any case but what happens when Mom doesn’t save enough for her kids’ education?

More importantly, how do you know if you’re not saving enough?

According to Market Watch, “More parents are refusing to pay for their kids’ college.” In fact, “just seven in 10 parents are saving money for college, down from 72% two years back.”

Still, CNBC reports that “Although total student loan debt currently stands at an all-time high of $1.5 trillion, the vast majority of [U.S.] families still say it's worth it, according to a new report from lender Sallie Mae.”

So to save or not to save for the kids’ education? All signs point towards saving being a tremendously good idea, especially when coupled with the fact that 44% of parents feel guilty about not saving enough for college, as per Student Loan Hero.

Fortunately, there are many quick ways of knowing if you’re saving or not. It’s also never too late to start saving, so if you haven’t already, now is an opportune time to get on it.

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20 You Live By The Motto ‘More Is Better’ For Christmas

Via: IG

Christmas is a time of excess but it doesn't have to be a time of splurging on a bunch of gifts that will sooner be discarded in the corner.

Ann-Margret Gidley told ABC News she goes “all out” for Christmas, getting each child 20 gifts. "As a kid, Christmas was always a big deal and I just continued the tradition assuming it was normal for kids to receive a lot of gifts. I now see how privileged we were and are," she explained.

Splurging this much on birthdays and holidays may very well be a very good indicator as to why Mom isn’t saving enough for her kids’ education.

19 You Keep Telling Yourself You’ll Save Next Month

Via: IG

When it comes to saving money, it’s easy to fall into the cycle of saying “not this week” or “not this month.” There’s always something that happens, whether it’s a birthday, needing to purchase pictures at school, spending more on groceries than anticipated, a flat tire…. These things happen.

With that being said, it’s also important to budget a little extra for unpredictable events. However, it’s just as important to budget a little extra into a savings account, especially one dedicated to the children’s education. Tuition isn’t cheap and by delaying too much, it eventually won’t be possible to catch up.

18 You’re Using A Regular Savings Account

Via: IG

If you’re using a regular account to squirrel away money for education, then you’re definitely missing out on a lot of extra money. You’re especially missing out if you think just collecting all the extra change from your day-to-day transactions will be enough. Given that the education money won’t be needed for at least a decade (depending on when you actually started saving), then the best idea is to store it away in a high-interest savings account that will automatically grow your money. The more you put, the more you will actually get for it! Fortunately, there are also dedicated savings plans designed specifically for college that give back even more.

17 You Think Only Parents Can Contribute To a 529 College Savings Plan

Via: IG

In the U.S., putting money away into a 529 college savings plan is a very popular way of saving money for a child’s education. Other countries have their own dedicated plans as well.

Fidelity.com points out that there are two common misconceptions with a 529 college savings plan: “29% of people think only a child's parent can open a 529 plan [and] One quarter (24%) believe only family members can contribute.”

In fact, none of those are true. Thus, another sign of not saving enough is not asking friends or family to contribute. Rather than overloading on presents, it may be a good idea to ask relatives to contribute to the child’s education instead.

16 You’re Not Factoring In Inflation

Via: IG

Although Wise Bread ran an article about the “10 Signs You Aren’t Saving Enough For Retirement,” a good point was nonetheless brought up that also applies to saving money for the kids’ education.

“On average, inflation rates linger around 3%, which means that your expenses will double in less than 25 years. You will need to account for this, as it's one of the biggest […] planning mistakes anyone makes.”

Just because you’re putting away $100 now doesn’t mean that you should keep factoring in that same amount. At some point, you might need to increase it to $150 or more.

15 You Don’t Actually Have A Set Goal

Via: IG

Assuming you are indeed putting away a certain amount for the kids’ education, do you actually have a goal? Or do you put as much as you can each time you get paid?

With that, it’s also important to know how much you actually want to end up having by the time your children are ready to use the money. You can’t just put aside $20 per week and hope it’s enough in 18 years!

Setting a goal is very important, especially one that can be consistently achieved. Rather than setting aside “as much as you can,” try to instead put aside a set amount each time you receive money.

14 You’re Only Focused On Tuition

Via: IG

Fidelity.com also goes on to point that the 529 plan isn’t restricted to just the tuition. The same goes for plans in other countries but it’s important to do your research.

“In fact, funds in a 529 account can be used to cover far more than just tuition and fees—the funds in a 529 can also be used to pay for room and board, books and supplies, special services, and computers and related equipment,” they explain.

That’s certainly very good to know but it also points towards the importance of being savvy with regards to knowing how much you actually want to save.

13 You’re Hoping For A Scholarship

Via: IG

Sure, your kid may have mastered more advanced puzzles by the age of 12 months or may be speaking in complete sentences like the adorable little girl in the viral videos. But that doesn’t mean they are guaranteed to get a scholarship.

Sorry to burst your bubble but when it comes to saving money, it’s better not to rely on such hopeful expectations because the risk is simply too great. There’s a variety of reason why your child might not get a scholarship and being prepared for this outcome well in advance is the key to success – your child’s success!

12 You Spend More Than You Earn

Via: Teach Kids Engineering

We all like to live above our means. A $150 trip to the hair salon here, $50 manicure there, a $5 Starbucks caramel macchiato… the thing is that all of these expenses add up. As Business Insider advises,

“You also can't assume you'll be earning more in the future in order to justify overspending in the present moment.”

Saving money should be the first priority above everything else. Then, if you have some money left over can you actually think about getting sushi or anything else fun.

“What people typically do is the opposite of that, thinking, 'I've got to buy this, this, and this, and whatever's left, I'll save.' Pay your future first, and make sure your present is secure,” goes on to say Business Insider.

11 You’re Prioritizing Retirement Over College Costs

Via: IG

Saving for retirement is just as important as saving for a child’s education. As surprising as it may be, Student Loan Hero actually found that,

“Although 37% of parents say no investment goal is more important than saving for their child’s college education, 44% actually prioritize retirement savings above all else.”

“Other parents prioritize saving for a home (31%) and life insurance (24%) first. Surprisingly, another 6% said they’d rather save for travel than for their kid’s college costs.”

The data is certainly very interesting but it would be even better if those same parents could be re-interviewed once their kids are ready to go to college to see if there has been a shift in mentality.

10 You’ve Considered Using Your Retirement Savings

Via: HuffPost

If your among the 44% who would rather save for retirement than put away money for your kids’ education, then you may have thought of another alternative to helping them fund their studies. Student Loan Hero also discovered that “37% of parents said they’ve already considered borrowing from their retirement savings.”

Wow! However, doing so can actually come with major penalties. Are you really prepared to pay a 10% fee on the money you have carefully save up for years? Rather than thinking you might rely on your retirement, just put money away in a college savings account instead.

9 You’re Worried About Financial Aid Restriction

Via: IG

When it comes to saving money for college, many parents become worried that if they put away too much, their child might not qualify for financial aid. Fortunately, that isn’t actually true! Fidelity.com explains,

“This misconception can be particularly harmful if it keeps parents from saving. While it's true that 529 assets do affect financial aid, it's a potentially small impact: Parent-owned 529 plan assets are considered a parental asset and are factored into federal financial aid formulas at a maximum rate of only 5.6%.”

The takeaway here is not to worry and still save as much as you can. It can only help!

8 You Live Paycheck To Paycheck

Via: Psychology Today

According to a survey conducted by CareerBuilder, “78 percent of U.S. workers live paycheck to paycheck to make ends meet.”

The percentage likely isn’t any lower in most other countries but it’s also something that can make saving for college seem impossible. There are many tips and tricks as to how to get out of the paycheck-to-paycheck cycle but all of them require careful planning. Among other reasons, Forbes advises tracking your spending, making savings automatic, and taking a hard look at your expenses.

Do you really need that Amazon Prime membership if you barely use it? Or do you even need cable if you're always watching Netflix?

7 You Use Your Savings To Cover Emergencies

Via: IG

We’ve glazed over emergencies but another reason you may not be saving enough is if you often find yourself dipping into your savings to pay for emergencies. Fridges and stoves stop working unexpectedly, flat tires happen… things happen all the time. But if you’re always using the savings that you intended to use for college than that’s not getting you anywhere at all.

Instead, it would be a very good time automate money going away into a savings fund for education and a separate one for emergencies. That way, you won’t be as stressed when the unexpected happens – and let’s get real here, the unexpected happens all the time when you’re a parent.

6 You Don’t Actually Know How Much You Spend

Via: IG

We have already covered spending more than you earn but if your earnings aren’t necessarily the problem but you just simply don’t know how much you actually spend in a month, then that’s a red flag too. Let’s say you have done everything right when it comes to putting money away and you have a set amount automatically being deducted without you even giving a second thought about it.

That’s great! Does that mean you should spend the rest of the money? Not so fast! What if you could actually save even more for your child’s education? Wouldn’t that be even better? Taking a hard look at your earnings and expenses is always very important.

5 You’re Counting On Student Loans Later On

Via: IG

Some parents don’t even think to save for college because they rely on scholarships or they’re too worried that their efforts will get in the way of financial aid. On the flip side, other parents don’t save because they think their child will be able to secure a student loan later.

While many students are indeed able to secure loans, there are many who find themselves unable to because of the family income. Let’s say in the future, your daughter graduated with $29,000 or more in student loans and lands a job earning $30,000 a year. Repaying that debt is quickly going to become too much and the sad reality is that many don’t go on to make enough to cover their loans.

The better alternative is for parents to get a head start saving for college years in advance.

4 You’re More Focused On Paying Off Your Own Loans

Via: IG

Many parents make the mistake of thinking that they will start saving for their child’s education when they pay off their own student debts. While it certainly makes sense, it doesn’t actually help. A better strategy would be to put money aside both to pay off the debt and to fund the future tuition. Sometimes hunkering down and living a minimalist lifestyle in terms of expenses can also be incredibly beneficial to paying down debt faster. Achieving a FIRE (financially independent, retired early) lifestyle isn’t possible for everyone but it certainly helps to take a hard look at what’s essential and what isn’t.

3 You’re Still Saving The Same Amount, Despite Having More Kids

Via: IG

If you started saving for your child’s education well in advance, that’s great! The amount you may have been putting in is entirely up to you but there are handy guides online as to how much you should have depending on your child’s age.

But what if since starting, you have had one or two more children and you haven’t thought to increase the amount you have been putting in? Having more kids is great but it does become a little more challenging with regards to college.

This is perhaps when it might be a good time to turns to friends and relatives for a little boost.

2 You’ve Underestimating College Costs

Via: IG

Fidelity explains, “College costs are increasing at a higher rate than inflation and it can be hard for parents to know how much money they will need for their children's education. Nearly half (45%) of parents admit they do not have a good idea regarding exactly how much they should be saving each month.

Many parents underestimate how much college will cost by the time their child is ready to head to campus.”

Turning to a financial professional may be a very good ideal or you can simply do your own research. How much you should be saving depends on a lot of factors.

1 You Leave Your Debt For Tomorrow

Via: IG

How much is your combined debt? The mortgage, the car loan, the credit cards, the line of credit… all of it combined! And what are you actually doing to bring it down? If the answer is “not much” because you’re too busy spending, spending, spending, then that’s certainly another big red flag. If you’re not paying down your own debt, then how can you expect to save enough money for your kids’ education? The thing is that debt eventually catches up with us and when it does, it forces us to pay even more than we would have originally. It’s just not worth it in the long-term!

References: Market Watch, CNBC, Student Loan Hero, CareerBuilderABC News, Wisebread, Fidelity, Business Insider, and Forbes.

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