The Power of Saving Socially for College

Apr 28, 2021

"Alone, we can do so little; together we can do so much." – Helen Keller

So many of life’s lessons focus on the importance of a group coming together to problem solve or reach new heights, whether that be in sports, work, or even global diplomacy. When it comes to finances, however, the American approach is that it’s each man for himself. Imagine if we altered that formula and made saving money a social experience. That’s where Backer comes in.

We believe in the strength of community financing, and the numbers back us up. Our families save 40% more with their college funds than the industry average, and that’s because 37% of our assets come from gifters. Making it easy for friends and family to contribute on birthdays, holidays or even a recurring basis, is at the heart of what we do.

Our goal is to break the stigma of treating money as a gift. A recent study showed that a whopping 84% of parents would prefer receiving a gift contribution towards their kid’s education over toys or clothes, but only 33% let people know that. The stress of how to help kids graduate without taking on mountains of debt is a huge burden for families, and the people who care about your child would love to help if they knew the truth.

Most importantly, contributions don’t have to be large sums that pass on financial burdens to the gifters. Experts agree that a 529 Savings Plan is the best way to save for your kid’s future. With a 529 plan, savings are invested, which means every dollar will grow over the years. And better yet, the investment grows tax-free (just like a tax-advantaged retirement account), letting each dollar go even further. That means an aunt and uncle contributing $25 each month could grow to over $8,000 in 15 years.

Student loan debt has reached crisis levels in our country, with a record $1.7 trillion dollars owed. Social saving can help free our children from becoming part of these statistics. We hope that there will be broad action from the government to tackle the problem of school affordability, but in the meantime, let’s come together to create the building blocks for success.

Backer

Backer is a social savings platform that helps people create tax-free 529 accounts for their children, provides investment guidance, and allows family and friends to contribute with ease.

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