529 Education Savings Account Analysis

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One thing on parent's mind is paying for their kids to go to college. Many times when parents think about college they worry about how they are going to pay for it. Here are few costly mistakes that most parents make when saving for college. One is waiting way too late to save money, the sooner you start saving money not only will you have more money you can be sure that you have enough money. When saving money some parents use a 529 education savings plan. “ A 529 plan is an education savings plan operated by a state or educational institute designed to help families set aside funds for future college costs,” according to SavingforCollege.com. Another mistake parents seem to make is they stop depositing money in the 529 account. Even though they …show more content…
A 401(k) plan is a retirement savings plan sponsored by an employer. According to Fred Amrein,” Sometimes parents borrow money against the assets in their 401(k) plan to fund their child’s education. Depending on the rules of your 401(k), taking out a loan against your 401(k) may disqualify you from company matching funds.”Besides 529 plans there are a few other methods of were to save money. The most popular account used is a savings account. According to Sallie Mae, “In 2014 forty-five percent of parents used a general savings account, twenty- nine percent used 529 plans, twenty-four percent used checking accounts, twenty percent used investments, eighteen percent used rewards programs, and eighteen percent also used retirement accounts. In 2013 forty-two percent of parents used a general savings account, twenty-seven percent used 529 plans, twenty-seven percent used checking accounts, twenty-three percent used investments, twenty-one percent used rewards programs, and seventeen percent used retirement accounts.” Beside setting money aside another way to save money for college is scholarships. There are very many open scholarships that people can apply for. Open scholarship are scholarships that anyone can apply