401 "C"

Start Saving for Your Future in College

According to one Wells Fargo study 37% of people expected to work until they die. Quality 401 k plans are designed to allow individuals to enjoy a comfortable retirement. However, not all 401 k plans are equal, and it takes a certain level of understanding to make an optimal decision to choose the most beneficial plan. 

The average college student in America (according to a 2015 study) graduates college with approximately $28,950 of debt per borrower. Although many college students are educated about the importance of managing finances and the alternatives available, many still graduate with financial woes.

In Consumer Behavior class this morning, our group was tasked with coming up with a innovative way for college students to save money while in college. Our solution was the 401 "C." According to our plan, instead of receiving credit cards from banks during Cat Fest freshman year, students would receive special savings accounts. These accounts could be physical, or digital (through a financial institution). Students would be motivated to deposit money into these accounts through a contest. At the end of four years (or until graduation) the student with the highest amount of money saved into this special account would receive a 100% match deposited into their account. The catch: once students deposited into this account, funds could not be removed prior to graduation. 

One potential problem to this solution is the ability of some students to make deposits donated from relatives. To discourage this hack, student ID numbers would be required to access accounts. Our solution is not flawless, but this positive financial incentive would pose significant reduction in stress upon graduation, if students followed the plan. 

Would you participate in this college savings plan?