When you become a parent, there are so many responsibilities that come with it that you might feel overwhelmed at times. However, there are some fantastic resources put together by folks who have been there. Rely on their experience to help you with everything from birth through college.
Speaking of college, it is never too early to start educational savings for your little ones. The earlier you begin, the more money your kids will have for college, expanding their opportunities during that crucial life stage. Make the most of each opportunity afforded you and be sure that you research well and choose wisely from these and other suggestions you might find.
The 529 Plan is offered by various states and educational institutions in order to help families put aside educational funds. In 1996, the IRS codes were modified, allowing for these types of plans. The information was in Section 529, hence the name.
The state of origin does not influence where the funds can be used. The child can attend a qualifying institution in the same, or a different state than the 529 Plan.
Similarly, the 529 College Prepaid Plan allows you to purchase tuition credits at an educational institution. This allows you to pay current rates for future classes, a savings which could be significant. On the down side, your child might not want to attend that college.
UTMA and UGMA
For families with greater assets that include stocks, bonds or even cash, you might want to use the Uniform Transfer to Minors Act or the Uniform Gift to Minors Act. These will allow you to direct the funds specifically toward the child, though with significant account balances, you are likely to qualify for little financial assistance.
You might have seen commercials for Upromise, an enticing program that will allow you to direct funds to your 529 Plan each time you shop online. The monies can also be applied to existing loans, which means you can use this form of savings even after the child has started school.
Once you sign up, you will be instructed how to link your various accounts to the program and begin receiving rewards based on your spending patterns. In addition to the percentage cash back you receive on eligible purchases, you can earn more money by using their Upromise credit card.
Gift of College
Sign your child up for Gift of College, a great program that allows friends and family to gift directly to the college savings account. You can also teach your youngster to put away a portion of cash gifts to add to this fund.
Model financial responsibility for your youngster by starting college planning early. You can use one or all of these ideas to save for your children’s future. Research the 529 Plans to find the best one for you and take advantage of every opportunity that you can. You and your children will rest soundly, knowing their educational future is taken care of!