By: Christine Stoll, Executive Director, IDeal – Idaho College Savings Program
May 22, 2017
You value saving for college, but asking family and friends to help out (in lieu of buying your child more toys) might feel awkward. Use the following strategies to encourage gifting to your child’s 529 account without rubbing people the wrong way.
Talk about your goals with family and friends
It has been said that that if you want to achieve a goal you should: write it down, say it, and tell your support system about it. We agree, and higher education is definitely a big goal! Involve your kids by creating a save jar. Get them excited about college by talking to them about what it means, what they will do there and what types of things they could learn. Talk about your own experience. If you did not attend, but wished that you had, discuss what you think your child will gain by going. When your kids are excited about the goal they will tell your family members about it and share their excitement about saving money for it. Often, gift–givers are surprised to find that your child knows what the account is for and is jazzed to have others contribute to it.
Set an example
Encouraging others by doing is a great way to show the value of a college savings contribution. When loved ones have a special event such as birthday, Christmas or a graduation, ask if they have a 529 college savings account that you can contribute to and then do it. Make this your go-to for gifting. You will be surprised how grateful parents are for the very thoughtful gift of college savings. By doing this you are encouraging others to pay it forward and you are showing that it is actually a really great gift (and far from tacky)! If they don’t have an account, it gives you the opportunity to talk up how much you like yours and truly appreciate gifts to it.
Encourage gifting for special occasions
It can be awkward at first to ask that your family and friends forgo traditional gifts in lieu of college savings but it’s so worth it! Here is a suggestion for how to approach the ask:
Dear Family and Friends,
Gifts are never expected but if you would like to gift to (child’s name) for (special occasion) here are a few ideas: (examples could include) 1. Books, 2. A contribution to child’s 529 college savings account (be sure to include the gift code and web links or printed vouchers to make it simple for the gifter) 3. A suggestion for an experience like ice skating.
Many times children are sent cash or a check for birthdays or other events. Let your loved ones know that a portion of any monetary gift will be saved in your child’s 529 for future education. This lets them know up front what is important to your family.
Thank your gift givers
Make sure to follow up with a personalized thank you when people gift to your child’s 529. Hand written notes are especially prized but any type of thank you note gives you the opportunity to express your gratitude and to explain how important the gift is to your long-term education goals. Don’t forget to involve the kids in the thank you as well. If they can write or draw, include their thank you with yours. Hosting a video-call or sending a video via email works great for kids that are not big enough to write a thank you just yet. Another idea is to take a picture of your child with the money or the check and a big smile. These types of personalized feedback send the message that your gift was appreciated and that your child was indeed excited. Many times family members just want to see your child’s face light up. This is a great reminder that other things beyond toys do make kids light up!
Remind gift givers to take their tax deduction if applicable
In some states such as Idaho, any resident who contributes to the state’s 529 qualifies for the state tax deduction regardless of account ownership status. If your gift giver can benefit from the state tax deduction, make sure to remind them in January about the gifts that they made in the previous calendar year. Make sure to include any proof you have of their gift, (log into your account and print off your gift summary) and anything else that will make it easy for them to take the state tax deduction such as the deduction limits. Include a personalized thank you for their thoughtful gift.
In the end, the person gifting will make the choice but you have indicated that this is an important goal in your family. They may not choose to contribute right away but each time you remind them, the more likely they will be to contribute in the future in lieu of a toy. You can then look forward to thanking everyone for helping to make the goal an affordable reality at your child’s graduation party!
About the Author:
Christine Stoll is the Executive Director of IDeal – Idaho College Savings Program. The IDeal Program is celebrating its 15th year helping families save for their higher education goals in a tax advantaged way. Idaho tax payers can qualify for an annual state tax deduction of up to $4,000 of contributions for single filers and up to $8,000 of annual contributions for those married and filing jointly.
For more information about the Idaho College Savings Program (“IDeal”), call 866-433-2533 or visit www.idsaves.org to obtain a Disclosure Statement. The Disclosure Statement discusses investment objectives, risks, charges, expenses, and other important information. Because investing in IDeal is an important decision for you and your family, you should read and consider the Disclosure Statement carefully before investing. Ascensus Broker Dealer Services, Inc. (“ABD”) is Distributor of IDeal.