By Young Boozer, Alabama State Treasurer and past Chair of CSPN
August 27, 2018
What an exciting time of year—6-year-old children skeptically attending first grade, 17-year-old teenagers excitedly entering their final year of high school, and young adults enjoying the freedoms and circumstances of undergraduate studies. What a great time to focus on the tremendous benefits of saving for college by using a 529 plan. It is, without a doubt, the best way to invest in your child’s or your grandchild’s college education.
People are always asking me, “When is the best time to start investing?” When I hear that, I am reminded of the old adage about planting a tree. The best time to plant a tree is 20 years ago. The next best time is today. It is the same for college savings. If you haven’t already begun, open the account today. There are plenty of excellent choices. You can view your options at your state’s 529 program website or on the College Savings Plan Network website: collegesavings.org.
If you have opened a 529 account, we encourage you to make frequent contributions. Save on a regular schedule. Make giving a habit. Find an amount with which you feel comfortable and put it in the account every paycheck. It will add up and make a difference. I challenge you to let compound interest work for you! As my father once said, “compound interest is the eighth great wonder of the world” as it is always working for you.
In addition to old adages, there are natural laws. One of those is Newton’s First Law. It’s inertia. Simply stated, a body at rest tends to stay at rest and a body in motion tends to stay in motion. I have adapted the basis of Newton’s First Law into Boozer’s First Law. It relates directly to saving for college. Simply stated: An investment at rest tends to stay at rest, and an investment investing tends to stay investing.
Fight financial inertia. Start saving today.
About the author:
Young Boozer is the Treasurer of the State of Alabama and the past Chair of the College Savings Plans Network. He also serves as chair of the board for Alabama’s Prepaid College Tuition Program (PACT) and Alabama’s 529 college savings program, CollegeCounts. CollegeCounts has experienced growth of 87% in assets and 48% in number of accounts since Mr. Boozer began his first term in January 2011.