A Little Savings Boost Can Go a Long Way
As a parent, it’s normal to worry about your child’s future, but the alarming projections of what college tuition will cost when your little one is older can be a bit overwhelming. Luckily, a 529 college savings plan is designed to put you in charge and set you on the path to meeting those costs.
The sooner you start, the more headway you’ll make, so the important first move is opening a 529 account and pledging to make monthly contributions to your college savings. Every family has varying income, expenses, and financial constraints, so decide on the contribution amount that fits in your specific family budget.
The next step is to find ways to augment your monthly contributions whenever and wherever possible.
“The old saying is that you eat an elephant one bite at a time,” says Shanna Barwick, a mother of five who saves with South Carolina’s Future Scholar 529 Plan. “The same is true with paying for college. Open an account and contribute to it as often as you possibly can.”
So where do you find extra cash to add to your 529 plan contributions? These simple moves can help you find funds to boost your college savings:
- Cut the (cable) cord. According to The Simple Dollar, getting rid of cable provides an average monthly savings of $103. Not ready to give it all up? See if you can trim the extras.
- Eat out less. Let’s say an average meal out for your family costs $50. If you go out to eat just two fewer times per month, you could save an extra $100 to help you reach your savings goal.
- Let kids contribute. When old enough, children can pick up small age-appropriate jobs to help fund their 529 plans. Younger children can give part of their allowance or perform jobs around the house to earn money to contribute. Your children will learn budgeting and responsibility. The knowledge that they have ownership in providing funds toward paying for college tuition will empower them. Show your child how to track your plan’s earnings so you can both monitor your plan’s growth.
- Encourage family and friends to contribute. Does a special aunt or grandparent want a gift suggestion? A 529 plan contribution is the perfect answer. “My children really don’t need new toys,” says Barwick. “They need money for college. My parents know that they can give me money for my children’s birthdays, and I will put it directly into their college savings account.”
- Re-evaluate at least once a year. Did you get a raise this year? Money back on your taxes? Good for you! Increase your monthly contribution amount to your 529 account. Before long, your child will be receiving a high school diploma, and you’ll be glad you did.
Funding your 529 plan can be easy. The key is making contributions with a lot of consistency and a little creativity to move you toward your savings goal. When you contribute to your 529 plan, you’ll get an important bonus – the peace of mind that comes with knowing you’re also contributing to your child’s future success.
About the author: Curtis Loftis is the State Treasurer of South Carolina. He also serves as the administrator of South Carolina’s Future Scholar 529 College Savings Plan. Visit treasurer.sc.gov or futurescholar.com for more information on ways to save through a 529 plan.