Holiday Gifting Tips: Requesting the Gift of College Savings

Holiday season is fast approaching, and busy parents, grandparents, extended family and friends are all starting to think about what holiday gifts are trending this year. Want a great tip that is always on trend? How about a contribution to your child’s 529 college savings account? It’s one of the most important gifts they could receive. Your child may grow tired of the latest toy, but you know they will never outgrow the gift of education.

That’s why you want to encourage close friends, uncles, aunts and grandparents to contribute to your child’s education, but the thought of asking may have you feeling a little awkward.

It shouldn’t! Studies show that while 90% of grandparents would be happy to contribute to a grandchild’s college education instead of giving a traditional gift, only 21% of parents ever ask them to.

You can ask the important people in your child’s life to give the gift of education without feeling awkward. One of the following strategies can help.

Start spreading the news.

As soon as possible after you’ve opened your child’s 529 account, start spreading the good news. Tell your family members and friends that you have begun to save for your child’s education. Explain how much it will mean to you if they choose to give the gift of education when special events arise.

It will be easier to share your gift-giving requests if you do so well before holiday shopping begins or birthday parties are planned. Loved ones will know that whenever they wish to mark an important event in your child’s life with a gift, you hope they will consider the option of a contribution to your child’s future education.

Let them know: a little can go a long way.

Let family and friends know that even small contributions add up. While everyone knows about the high cost of a college education, 529 plans are designed to compound any interest earned and can grow over time. Most plans have very low minimum contributions or no minimum at all, so there’s no pressure to give a large amount.

Put it in writing.

Sending invitations to your child’s birthday party? Include a note explaining to attendees that if they plan to give a gift, a contribution to your child’s future education would be perfect. Be sure to explain how to contribute to your child’s 529 account in the invitation as well.

When loved ones send a check or give cash to your child as a gift, send them a thank you note telling them that some of their gift will be used for your child’s future education. That way they’ll know that contributions to your Future Scholar 529 account are always welcome.

Spill the beans: they could get a gift back.

Be sure to let the important people in your life know that their contributions may come with a gift for them, too. Many states allow contributors to deduct at least a portion of the contribution from their state tax returns. For example, in South Carolina, 100% of contributions to a Future Scholar 529 account are deductible on South Carolina state income tax returns.

Think ahead.

Are you expecting a baby? Congratulations! Go ahead and open a 529 account in your name that can be transferred to your future child once they have a social security number. That way, you can include a contribution to the 529 account on your baby registry. Perfect!

Show them how it’s done.

Show others how important the gift of education is to your family. When you’re invited to a birthday party or you’re giving a Christmas gift, ask if the child has a 529 college savings account. If they do, give them the important gift of college savings. You’ll be giving a wonderful present and showing others how much you would value the same gift for your child.

Always top the list with a 529 wish.

Be sure that “a contribution to my 529 college savings account” is always at the very top of your child’s wish list. Grandparents, aunts, uncles, and friends are bound to want suggestions for holiday or birthday gifts. You can always add inexpensive items to your list in case loved ones would like to give a toy or other gift that your child can unwrap and enjoy now.

When your child is old enough, describe how a 529 account works. Explaining how you and your loved ones are preparing for your child’s future makes a great lesson in financial planning. As your child grows, they will appreciate how valuable contributions to their 529 account are to achieving their goals and dreams.