How to save for your child’s education, now!
Do you want $250 to kick-start your child’s education fund? Keep reading!
It’s very easy to start saving for your child’s education. It doesn’t require a lot of money to get started. And you can do it without hiring a Financial Planner*! You can even set it up to allow friends and family to contribute as well!
I’m specifically discussing Connecticut’s 529, known as CHET (Connecticut Higher Education Trust). Each state has its own 529 plan, each with its own advantages/disadvantages. If you live outside of The Nutmeg State, I can help you break down your state’s 529.
There are many advantages to saving for your child’s education in a 529, vice just putting money in a mutual fund:
- Earnings grow tax-free**
- State income tax deduction on contributions***
- No income limits on parents
- No annual contribution limit
- Only $25 to open an account (yes, that’s right!)
- Anyone can contribute (grand parents, uncles, aunts, friends, anyone!)
Can you think of a better option for birthday presents, especially from distant family? What is the condition of that plastic thing Grandma sent last year? A gift given at age 1 could double 2.5 times by graduation: $25 turns into $125, $100 into $500!
What is a 529, you ask? Think of it as a 401k for college. If the funds are used for qualified education purposes (such as books, tuition, fees), there is no tax on the growth! Uncle Sam can’t dip into these pockets!
Now first things, first. If you are still working on your Debt Snowball, your Emergency Fund, or are not investing for your retirement, it’s not the time to start fully funding your kid’s college fund. But you should still open it and allow contributions! If I go to your kid’s birthday party, that’s the gift I want to give!
Ok, now for the ‘how to’ part. If you live in CT, go to www.aboutCHET.com, and click the “Open An Account” button at the top. But before you pick an account, take your time and evaluate the different options. If you need guidance, don’t hesitate to talk with your financial advisor, or let me teach you what you need to know to make an informed decision (my rates are much less than the $250 you could get from the state!)
Speaking of $250, to qualify here are the basics:
- Account has to be opened before the child’s first birthday
- The child has to live in CT
So, what are you waiting for? Your child will be headed off to college before you know it! Help them be prepared financially and avoid crippling college debt!