Committing to College Savings: How to Make Your Financial Resolution Stick

http://www.savingforcollege.com/articles/committing-to-college-savings-how-to-make-your-financial-resolution-stick-1017

As the ball drops in Times Square and champagne glasses clink at home, we celebrate the start of a new year and new beginnings. With a fresh slate, many of us promise ourselves that this is the year that we'll stick to that healthy diet, keep regular visits to the gym, save more and spend less. But how many of us stick to these self-imposed commitments? For those of us on the road towards saving for our children's college education, sticking to your saving goals may be more manageable than we think. Here are eight ways to help make college savings resolutions stick:

1. Depart the Procrastination Station: There's no denying that a college degree is one of the most important investments parents can make for their children—nine out of 10 parents say higher education is one of the best gifts they've ever received.¹ But with parents only on track to save just 29 percent of their college funding goals by the time their child graduates from high school, the sooner you start saving (even in small increments), the more you can chip away at reaching your goal.²
2. Check Your Spending Report Card: Is your child starting elementary school this year and out of daycare? Or is there no longer a need for a babysitter now that your daughter's old enough to watch your son? By evaluating your spending, you can identify which expenses can be seamlessly converted into monthly college savings. Since your family is accustomed to this financial outflow, redirecting money towards investment goals, like saving for college, will be a natural transition.
3. Will Yourself to Bill Yourself: Think of contributions to a college fund like a monthly bill to be paid. By making sure you allocate money into the college fund each month, your contributions will feel less like a chore and more like monthly habit.
4. Get Your Fiscal Physicals: Online calculators (like Fidelity's College Savings Calculator) can assist you in your journey and keep you on track. Use them to explore savings options and try out different scenarios so you can figure out what your savings goals should be.
5. Contemplate How to Automate: Make saving money a habit. When opening a 529 account, you can automate your college savings contributions so regular monthly payments are transferred directly from your bank account, helping you establish a routine.
6. Make Your Spending Count: If you're someone who pays off your credit card balance in full each month, then credit cards offer a wide variety of rewards programs that can help. Whether it's making a quick dash to the grocery store or booking your next family vacation, utilizing credit cards opens a plethora of opportunities for you to incorporate saving into your everyday spending—and when those rewards programs are linked to your 529 account, they can even boost your college savings funds.
7. Keep It a Team Effort: This past holiday season, 84 percent of parents said they'd welcome college contributions in lieu of traditional parents.³ Yet, only one-in-four parents report that they've encouraged family and friends to consider gifting to college savings.⁴ In the midst of baby showers, birthdays, Christmases and bat mitzvahs, there are plenty of opportunities for college gifting—but you won't get contributions unless you take the initiative to ask!
8. Always Reach a Little Higher: Nearly half of parents with kids approaching college say that looking back, they could have saved and extra $100 or more each month. By doing so, parents would save an additional $1,200 a year, and over 18 years, an additional $21,600 (and that's before investing those dollars in a dedicated college savings account, which could potentially grow even more.) If you're not sure where that extra $100 should come from, you can always find them in your tax returns, bonuses or raises. Even passing on ordering out for a few dinners can free up more for savings—it's the little things that count.

While our commitments to hitting the gym may fall to the wayside in our pursuit toward a better-than-ever 2017, we can find solace in maintaining our personal financial promises. Whether our children are tossing up their rattles, or tossing up their graduation caps, keeping up with college savings strategies is a resolution you can keep this new year.

Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Study reveals parents could have saved $20,000 more for college

Fidelity Brokerage Services LLC, Member NYSE, SIPC,

900 Salem Street, Smithfield, RI 02917

785410.1.0

©2016 FMR LLC. All rights reserved.

Fidelity Investments, "2016 Holiday Gifting Snapshot," December 2016
Fidelity Investments, "2016 College Savings Indicator," September 2016
Fidelity Investments, "2016 Holiday Gifting Snapshot," December 2016
Fidelity Investments, "2016 College Savings Indicator," September 2016