Average balances for 529 college savings and prepaid tuition plans grew to a record $17,174 in 2012 — up 12% from an average of $15,349 in 2011, according to a report from the College Savings Plans Network, a nonprofit and affiliate of the National Association of State Treasurers.

Also known as “qualified tuition programs,” 529 college savings plans are typically offered by the states and allow holders to save money and withdraw it tax-free, as long as the proceeds are used towards approved college costs — typically tuition, fees, room, board and other required supplies. Another kind of 529, prepaid tuition plans, let savers prepay for future tuition and lock in current prices, but they typically do not cover other expenses.

In December 2012, the number of existing 529 accounts increased by about 4% to 11.1 million, up from 10.7 million in December 2011. Total 529 investments reached a record $190.7 billion, up from $165 billion in 2011.

Those numbers were also helped by a strong stock market last year. In 2012, the S&P 500 soared 13%.

Children with a college savings account are seven times more likely to attend college than those without one, according to a 2010 study by Washington University in St. Louis’s Center for Social Development.

The increased savings will also allow these students to be less dependent on costly student loans, said Michael Fitzgerald, Iowa State Treasurer and chair of the College Savings Plans Network. “Every dollar you can save is a dollar you don’t have to borrow,” he said.

Yet, students and their families are still struggling to keep up with rapid increases in tuition.

“We are sort of on a national treadmill,” said Patrick Callan, president of the nonprofit Higher Education Policy Institute. “States are putting more money into financial aid. Students are borrowing more, and parents and grandparents are saving more. But tuition is still outpacing people’s likely ability to pay.”

Average tuition paid at public community colleges and four-year colleges and universities rose by 8.3% last year, according to a recent report by the State Higher Education Executive Officers Association.

For the 2012-13 school year, the average prices for tuition, fees, room and board for in-state students at public four-year colleges and universities is $17,860, according to the College Board. And the average bill at private institutions is nearly $40,000.

“It’s getting so expensive so the importance of saving for college is growing as well,” Fitzgerald said. “It’s a real problem we face, but [529 plans are] one tool that will help.”

Article originally published on CNN Money

Money is a tool to get what we want and need, so it makes sense to set up a plan for how your money will help you achieve those goals. To do this you need to set up multiple accounts.

That’s right, multiple savings accounts for each of your goals, no matter if it’s a want or need.

This does many different things:

#1 It keeps you from buying the stuff you want on a whim

Whether it’s a new tech toy or tickets to your favorite concert, setting up an account specifically to save for that goal will keep you from spending on them when you don’t have the money.

We buy on a whim because we don’t think the opportunity will come up again for a while and also we’re in a moment of weakness because it wasn’t thought out beforehand.

Setting aside money that you know will be going to your new gadget builds your patience surprisingly and it’s exciting because you’re not saving for something “boring” like retirement, but something you’ll get your hands on in the near future.

We love challenges, but what we love more is busting down those challenges. This is one area where you get to feel that “win.”

#2 We respond to “labels”

Humans unknowingly act different when something is labeled. If we see anything that has a religious symbol on it, we will automatically treat it with respect. When we see the color red, we automatically associate it with other objects labeled red etc. If society “labels” something as good or bad. we unconsciously will react accordingly.

The same rings true here with your savings buckets.

When you label each individual bucket, you are essentially labeling each for that specific task. We will then treat each individual goal/account accordingly to how we labeled it.

This makes us less prone to just spend away. For example, my wife Sam and I have different accounts for emergency funds, future children, annual vacation, 2 personal savings we each get to save for something we want and more.

Money is then automatically filtered to each account in regular intervals and gradually will accumulate to achieving success.

How to Get Started

The problem many run into is piling all savings into 1 pot and thus we draw more out for vacation than we expected, we spent more on clothes than we wanted because the money is there! It just doesn’t have a purpose in your mind thus you think “Why not?”

Make sure when you start out that you are getting a $0 minimum balance, $0 monthly fee account. Here you aren’t looking to build savings from interest, as interest isn’t even worth accounting for as most are below 1% now. Your focus is to simply stockpile for each individual goal you set.

All our savings accounts are also online and at a different bank than our main checking. This is another wall we put up to keep focused as money being transferred across banks takes a couple business days. For this reason, we pile on to not buying on a whim as we can’t simply go online and transfer the money immediately to our checking account.

Saving doesn’t have to be dull, save for emergency but also save for things you love.

Do you have a similar system setup. How do you save?

Joe Cassandra, a personal brand equity strategist, is the Founder of the 7Minute Entrepreneur, where you will learn how to control your early career to earn more and find your adventure. You can also follow him on Twitter.

Here, we offer some tips for saving money on different types of personal insurance.

Try to negotiate with your insurance company.

In life, many things are negotiable. Don’t just settle for the rate that any insurance company gives you. Negotiate it, and make sure you are clear about the fine print. Sometimes insurance providers will sneak in service line items that you don’t need or want to pay for, and if you don’t read the fine print, you may wind up wasting a ton of money on such services that you will never use.

Maintain a high deductible.

If you are generally not accident-prone, a great way to save on car insurance is to maintain a higher deductible. The lower the deductible is, the more expensive the insurance rate tends to be. So consider the odds of whether you’ll get in an accident when considering your deductible. This goes for homeowners insurance as well – if you are willing to take the risk that your home will remain safe and sound, go for a higher deductible and save money.

Join a large company.

There are exceptions to this rule, but generally, the larger a company is, the better rates they are able to get on medical, dental, and eye insurance. Usually, these companies are able to obtain lower deductibles, and will also pay for some portion of each employee’s insurance.

Stay out of trouble!

With car insurance, the more accidents you get into, the higher your insurance rates are. So be a safe driver. Don’t drink and drive, and follow the speed limit. Always be aware of other drivers around you, who could simply be more of a danger to you than you are to yourself.

Take advantage of ‘good student’ offers.

Being a good student often gets rewarded by car insurance with lower rates. This can mean everything from being on the honor roll to hitting a certain GPA, and the criteria for being a good student varies from one insurance company to another. Be sure to ask your car insurance provider about the offers they provide for being a good student.

If you are a student, hit the books! Your car insurance rates could improve vastly as a result.

Good credit can equate to good rates.

According to the Insurance Information Institute, many homeowners insurance companies will use your credit history to determine your rates. So make sure you do things like paying your credit card bills in a timely manner, and be sure to monitor your credit score with some regularity.

Try a dental college instead of dental insurance.

According to Money Talks News, prices for dental care at dental colleges can be as little as half that of your average dentist, and “every procedure is overseen by qualified and very experienced faculty.”

Get those chompers cleaned at a dental college and save $$$!

Consolidate policies.

Many auto insurance company also offer homeowners insurance. By consolidating the two policies under the same carrier, you can save a significant amount of money.

Make sure your home systems are updated.

According to Noreen Perrotta, Consumer Reports finance editor, if your home systems (including heat, plumbing, and wiring) are less than 10 years old, you can save up to 15% on homeowners insurance. Be sure to enquire about this with your insurance company. They might not just offer it up, so it’s worth asking about.

There are plenty of opportunities to save money on all types of insurance if you just keep your eyes peeled, maintain good habits in life, and ask for discount opportunities. Don’t be shy when it comes to dealing with your insurers. They certainly aren’t shy about taking your money!

Cara Aley is a freelance writer who covers a wide variety of topics from how to have the cleanest gutters in town to digital marketing strategies for small businesses. She resides in San Francisco and is a singer-songwriter in her spare time. 

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Let’s meet at Starbucks for coffee…

Want to do lunch?

There’s a new movie I’m dying to see

We are asked to participate in social functions like these on a daily basis.  As a business owner all that matters is the bottom line but what we invest in beyond the bottom line determines our lifestyle.  So why does having money under 30 matter? The answer is very simple- because is sets the foundation for the future.

There are lots of things to do, places to go, and people to meet but as you go through life you realize more and more that what you thought mattered doesn’t really matter at all.  Almost all of us start out with some form of debt whether it be a new car, student loans, or a business venture as we grow through our 20’s and take on more and more responsibilities.

It’s important to recognize the value of our money and where it’s being spent, everything from the garbage, water, and sewer bill to our own insurance. Because going to school, getting a job, getting married, having children is not on the list of many 18-25 year olds. In fact, you’re more likely to find this group on the beach, taking a vacation, writing their own books, living with their parents and exploring the possibilities of what life is like on their own terms. And while you might not be thinking about the following list in your low-mid-twenties I can assure you what you think about and do in your late 20’s really does matter.

Beyond coffee, lunch, drinks, and shopping for most of us, our late twenties are focused on starting families, getting married, enjoying the honeymoon, buying a house, getting a new car, making some investments, or even planning for retirement.  But what the hell is all that going cost?  You might be surprised:

Average cost of Family: $227,000 and rising

Average cost of Wedding: $32,039

Average cost of Honeymoon: $5,111

Average cost of New Home: $272,900

Average cost of New Car: $30,274

Average cost of Retirement: $70,000 per year

Average cost of Health Care: $15,745 for family of 4

Total average cost: $653,069 and that’s only if we are retired for 1 year!

Add on top of that all of the unexpected expenses we might incur along the way.  And lest we forget the already accumulated expenses like student loans and credit card debt, which average of $40-$100,000. And we end up having more than 1 MILLION dollars in expenses, and you find yourself asking who’s going to finance that.

But wait, there’s one cost I didn’t mention and that is the cost of investments.  The BIGGEST investment we can make is in ourselves.  So as you look at your life and what lies ahead and behind you have the option to be average or extraordinary and there is only one thing that is going to set you apart from the AVERAGE and that is the investment in starting your own small business.  At an average cost of $30,000, this investment has the opportunity to pay back all of the expenses the AVERAGE American incurs.  And I know you don’t want to be average so you end up with two options that job with the boss you love, that broken down car that barely gets you there, that paycheck that pays all your bills and allows you to travel and see the world or that risk that you’re just not sure your willing to take.  Having the privilege of owning your own business is an incredible experience, it’s an extraordinary opportunity to grow, opens doors that wouldn’t otherwise be open, and expands the mind and enriches the body and spirit.  If there is one reason why having money under 30 matters it’s because it sets the foundation for your future and paves the road for you to follow your dreams.

Melissa Krivachek President of Briella Arion is deeply & passionately committed to the growth & effectiveness of leaders, teams, and organizations. Melissa is a High Caliber Leadership, Sales, and Personal Growth Expert, Author, Speaker, Coach, and Life Enthusiast! To IGNITE your Purpose, Presence, Passion, & Profit visit Briellaarion.com or Ignite-Leadership.com. 

Image Credit: Shutterstock.com

Image credit: Carl Richards

This picture demonstrates the basic idea of compound interest. You may not feel like the few dollars you put away today is doing much but that changes 10 – 20 years down the road. Give it time and you will come out ahead.

“It’s kind of like planting an oak tree. As Warren Buffett said in an interview with News Inc, “Someone’s sitting in the shade today because someone planted a tree long ago.” The same thing applies to compound interest. We have to live through the boring parts in order to reap the benefits down the road.

The Under30Finance Team

Coin Jar

How many pennies, nickels, and dimes do you lose over the course of each year? Whatever the number is the fact is you’re literally throwing money away. Set up a jar to collect all that change you don’t want to carry or that you find under the car seats. Just think of it as savings for that new car or house one day. You’ll be surprised how much is in there after 3, 5, or even 10 years.

Accountabilibuddy

Challenge a friend to save more than you! Or least have a competition to see who can save more. It doesn’t matter how much either of you make if you calculate the total percentage of savings from your earnings. For the loser? Happy hour is on them.

Unsubscribe

How many commerce catalogs and/or emails do you get? Get rid of them! If you’re serious about saving than you can’t be tempted into buying things. Even more importantly get rid of those daily flash sale emails. We all love the deals but they also encourage impulse buys for things you didn’t realize you needed until it was only $50!

Bank fees

More and more banks have added/changed the fees in their accounts. These could be minimum balance bees, overdraft fees or a variety of other little charges you might overlook. Call your bank and make sure you know the fee structures for your account. You can even ask to have certain fees removed or just go shopping for a bank with a better deal.

Set goals

Pop quiz: What is your monthly financial goal? You can’t say “save more” or “better manage my money”. How are you doing this? Be specific and set a number or a specific costly habitat to break.

Educate yourself

Money management can be intimidating for many people. However, in most cases the steps needed to better manage things are not that hard. No fancy degree required or pricey financial analyst. Set time aside to read up on personal finance each month. Subscribe to a handful of blogs or websites (hint hint Under30Finance.com) and make time to browse them. You’ll be surprised how quickly you feel more comfortable handling your money.

Setup a retirement account

If you don’t already have one, open an IRA and setup an automatic payment into it. It does not have to be big! Start small and work your way up. The easiest way to save money is to never have it in your hands in the first place.

Learn to cook

For some of us this might take a little practice. However, it will pay off in the long run. Eating out everyday is not only expensive but often unhealthy. Learning to cook will save you hundreds of dollars and you will always know the exact things you are putting into your body.

Use online tools

There are a variety of online tools to help you manage your money. Check out sites like Mint.com, Learnvest.com, and a new one called Smartasset.com. They are free and and with only a little bit of effort will give you some great insight into your spending.

Lose the gym membership

How much is your gym membership? It’s free to run, bike, walk, or hike. You can also easily setup a home gym with used equipment or basic things that will payoff in no time.

Good luck!

The Under30Finance Team

Image Credit: Shutterstock.com

1.)     Select a good and cheap bank

These banks will not waste your money in account fees and other unnecessary avoidable expenses. Having a bank that offers free online banking for students is also critical at ensuring you keep check fees in check.

2.)     Get credit cards that do not attract annual fees and interest rates

Getting these cards is not always so simple-you have to deliberately shop around for them. Saving on the credit cards also requires you pay debts on them fast in order to avoid high interest rates.

3.)     Reduce spending on food and beverages

Rather than eat out at expensive restaurants, consider catching some fast foods.  When it comes to drinks, local, affordable beer is better than foreign beer. A six pack at home is way better than a set of bottles at the bar.

4.)     Buy used textbooks instead of new ones

Use the different textbook price comparison sites online to buy books as this will save you money.

5.)     Buy a good coffee maker

You don’t have to spend on useless coffees at coffee shops. If you can tuck a nice coffee thermos in your backpack is critical to maximize the savings.

6.)     Stock up on snack foods

This is eventually cheaper than buying from coffee shops and fast food spots. It’s always cheaper. Moreover, doing this makes them more portable than you imagine.

7.)     Don’t buy bottled water

Instead, buy yourself affordable and easy to carry water bottle for refilling. If the water in your area is crappy, buying a water filter is an asset you can carry along with you rather than buying bottled water.

8.)     Take advantage of students discounts

This sounds like a good idea when you’re in college. There are several retailers who offer discounts to student customers. If you have a student shopping discounts card, use it or limit your shopping to offer days and during festive seasons. This can save you a lot of money in discounts and offers.

9.)     Buy used products whenever it’s possible

Get your products on eBay or craigslist to ensure that the prices are significantly lower than if you bought new. Sometimes, buying used is better than buying new and you should take advantage of the savings.

10.)     Consider getting free entertainment than paying for it

Go watch TV, screen free movies with friends on campus, go for touch football or rugby with friend, play tennis, or go swimming.   Just keep yourself moving, crush a few parties with free booze…it’s so much fun.

Kathleen is a professional writer at writing service EssaysCapital.com. Loves creating useful tips for students.

Image Credit: Shutterstock.com

Firstly let us distinguish between two scenarios, as with many young people especially those who were previously disadvantaged, some debt is necessary, for instance, many are paying off study loans that were necessary if you really needed to get an education. With that in mind, some have had to take out loans to assist their families, siblings etc. So we can conclude that debt is not always a bad thing, it can help people achieve some things that they would otherwise not be able to.

There is however the second scenario, this is the type of debt that is accumulated to enhance your social standing. We are living in a society where success is measured by the cars we drive, the houses we live in, the clothes we wear and the circles of entertainment we are associated with. Everyone wants to keep up with this lifestyle. We are also living in a society where getting credit is as easy as sending a message with instant approval, add increasing costs to this and you have a recipe for youth debt. So what do I do, I can’t afford to buy that couch cash, I walk into the shop, and get that couch anyways. I ask to pay over a period of time and at an interest. I am not saying it is wrong to do so, but did I consider waiting three month, saving and getting the couch cash instead of paying the interest that we are being charged. Not many do that. We are even buying food on credit. It all does not make sense, but it is happening. The youth is falling into the trap of easily available credit. Some youth see their debt as being empowering, they feel empowered by their credit cards and education loans.

Most common sources of debt:

House debt

Car debt

Education debt

Others like credit cards, clothing accounts, furniture accounts and cell phone accounts

Many do not consider the implications of being in debt at a young age. For instance you might end up with a bad credit record, with no one willing to lend you money for more important things. A bad credit may also affect your ability to secure certain jobs. The stress that accompanies the inability to pay your accounts may have negative effects on your health. A person will have to downsize later on in life, families become affected because if you start a family with the burden of debt, your whole family becomes affected.

Some tips on reducing debt

If you already have loans, pay in extra. This will reduce your capital amount thus the interest that you pay will be lower. Your period will also be reduced.

Set out a limit for which you are prepared to buy on credit, for instance, rather save up to buy furniture, clothes, rather than buy them on credit.

Never use credit cards for entertainment, if possible, reduce your credit card li limit.

Whilst still indebted, purchase things that you need, not want. For instance, if you are spending too much on your vehicle, maybe it’s time to get rid of it, or trade it in for a cheaper alternative.

Draw up a monthly budget which will show your income against the expenditure and will be the tool you use to make sure you don’t have unnecessary expenditure

Learn about credit by visiting your bank, reading newspapers and financial magazines. Before you enter into a credit agreement, take time to ask yourself the following questions: How much will your monthly repayment be? What percentage will the monthly repayment take out of your monthly income? How long is the repayment term? What happens if you are struggling to pay and what assistance is available to you?

Find other ways to make extra cash e.g. weekend jobs.

Develop the habit of saving money.

These are just some of the things one can do to reduce debt. More can and should be done to address this issue amongst the youth. More research should be undertaken on this topic, covering a whole spectrum of factors.

Lungile Cindi is an aspiring entrepreneur, qualified and currently employed as an Economist. She resides in South Africa and has a vested interest in the development and empowerment of youth world wide.

Controlling your own personal economy means no longer being at the mercy of the swings of the external economy, the rate of unemployment, or which party is in office. Let’s examine how you take back control of your own concerns.

Create Value

Money is simply one way to quantify value, and regardless of what the economy is doing, value is constantly being created. Therefore, there are always opportunities to create profit.

Examine the unique skills that you possess which provide value to your current company or business. Are there ways your skills can provide more, and thus create more income?

For example, my business once dipped because the buying habits of our customers changed. While it felt like the economy had dipped, the knowledge that I had gained in my business was still very valuable.

As my business readjusted, I did consulting for other businesses that were craving the knowledge I had. We now continue to offer consulting services as a secondary source of income, because the worth of doing so has been established. The most important part of your personal economy is the returns you can create for other people and your organization. If you increase the value of what you contribute, you increase your personal stock.

Be Marketable

Regardless of the state of the economy, there will always be who people spend money. You can be successful in any economic climate by finding where the money is being spent and stepping right into the stream of revenue. No matter what the stock market is doing or what the rate of unemployment is, companies will always need human capital, and customers are always buying something.

The media likes to declare that if the economy is doing poorly, the whole country must be poor. That’s not the case; believing this actually gives people an excuse to be unproductive. Instead, focus on enhancing your skills (and developing new ones!), networking, and coming up with new ideas that can benefit an employer – or your own entrepreneurial adventures.

Reputation is certainly a part of this; with social media and search engines, it’s becoming increasingly important. If there are negative reviews circulating about you, Google will find them. You can, however, flood the world with positive news about you. Press releases are a great way to do this. Furthermore, ensure that customers are cared for and encouraged to leave positive notes about you on online forums and boards.

One of the greatest hindrances to economic growth is resistance to change. The temptation for most people is to fight change and discourage it, when it is the very change that brings growth. A few decades ago, factory workers resisted the computer, but its invention has created more jobs and growth than the world has ever seen. Resisting these changes is like telling a car company it’s wrong for putting saddle makers out of business; the old manufacturers upgraded to make leather car seats. Instead of resisting change, embrace it and grow along with it.

Income Streams

A crucial part of a healthy personal economy is managing one’s finances. You’re your cash flowing by making money work for you. During times of boom, it’s tempting to spend more, buy bigger homes, and go on more vacations. When your income goes up, it gives you an opportunity to invest more. Dividend paying stocks, real estate, and income-producing websites are all mostly passive income streams that make your money work for you. When you have passive income from investments paying for your life, then you can increase your expenditures.

It’s common to see people taking advantage of a booming economy, only to be swamped in debt when things turn sour. Their response is to complain about the economy. Had they managed their personal finances, they could be sovereign over their future regardless of what the economy does. When you earn profits during good times, the money needs to be invested to create more money. One of the smartest things I ever did was create differentiated streams of income, apart from my business, so if anything ever happened, I would be fine. A strong foundation allows you to focus on other sources of revenue; you never worry about what the economy is going to do next.

When you focus on creating value, you no longer worry about job security, because it’s always there. When your finances are secure, there is peace of mind. And when you rely little on others, you have the freedom to create the life you desire.

Ryan Moran is an entrepreneur, writer, traveler, comedian, and overall cool dude. Ryan prides himself on inspiring, educating, and empowering people to have the freedom to live extraordinary lives. To discover the eight steps to controlling your personal economy, watch a free video series at www.FreedomFormula8.com. You can also discover more about Ryan at his personal blog, www.RyansReview.com.