As I write this, I can’t believe that Christmas and New Year’s celebrations have already come and gone. I hope that everyone reading this had a wonderful holiday with family and friends. You may be experiencing post-holiday blues as you settle back into your day-to-day life, but now is the time to get motivated and set goals for 2017. Though resolutions regarding health are admirable, I also encourage you to set financial resolutions—specifically, to save ahead for your child’s education with a 529 college savings account.
When making a New Year’s resolution, it’s important to reflect on why you’re making that new goal and how you plan on achieving it. So, why start saving for college? Whether your child is in diapers, kindergarten or even high school, saving now will relieve yourself from financial stress in the future. Along with peace of mind, tax advantages are another primary benefit of saving with a 529 plan. Not only does all money grow free from federal and state income tax, but many states offer income tax deductions for contributions made to 529 accounts. Here in South Carolina, we are fortunate to have an unlimited state tax deduction for contributions made into our state’s Future Scholar 529 College Savings Plan.
Furthermore, resolving to save more in 2017 can make a lifelong impact on your child’s future education goals. According to the Center for Social Development, children with a dedicated college savings account are 6 to 7 times more likely to go to college. So, not only will saving for college relieve your family from financial stress later down the road, but it will encourage your child to consider college as a probability, not a possibility.
If you’re new to 529 plans, it’s also important to consider how you will save. From payroll deductions to automatic transfers from a bank account, many 529 plans offer a variety of convenient ways to make contributions. Not to mention, you can decide when and how often to contribute. For example, South Carolina’s Future Scholar 529 plan allows your contributions to be made bimonthly, monthly or quarterly on any day of the month you choose.
If you already have an account—great! In 2017, challenge yourself to spend less on material items and increase your 529 plan contribution amounts instead. Clothes, toys and gadgets will eventually fall out of fashion, but a college education will last a lifetime.
With the ease, benefits and control provided by a 529 plan, adding it to your list of 2017 resolutions is a no-brainer. By starting now and saving consistently, you can make 2017 your most successful college savings year yet. Wishing you a year that is filled with love, happiness and college savings!
About the author:
Curtis Loftis is the Treasurer of the State of South Carolina. He also serves as the administrator of South Carolina’s 529 college savings program, Future Scholar, which celebrates its 15th anniversary this year.