I saw on CNBC that more people would rather save for their vacation than for the kid’s college fund:
“We have seen this in recession eras before,” says Larry Hugick, chairman of Princeton Survey Research Associates, which conducted the interviews with 1,508 financial decision makers over two weeks in May. “People want to give themselves some sort of treat. They want their vacation.”
Hugick also speculated that short-term goals, like a new car or vacation may seem attainable by comparison to college expenses. The rapid rise in tuition in recent years has seemed to dwarf the most conscientious saver’s account balance, and Americans wouldn’t be blamed for feeling hopelessness toward covering their children’s college expenses.
Who can blame them? A fun vacation might be worth more today than a college education tomorrow. At least the family will have the fun memories vs. the potential debt of college and no certainty about a job from all that money for the kid. Another reason for the reluctance to save is that the less parents have in their bank accounts or savings by college time, the more financial aid junior might receive. Savings in this country often makes one a sucker, so why scrimp and save to pay full freight when your neighbor gets aid or financial help for making more impulsive decisions?