By Patricia Roberts
April 24, 2017
As I prepare to take my very first qualified withdrawal next week, I think back to establishing the 529 college savings account I am about to tap. The decision to start saving when my son, Ben, was just an infant is one that we plan to celebrate next week along with his decision about which university to attend. While at the time of this writing, he has not yet made his final choice, planning ahead has clearly presented him with options he otherwise would not have had. It has also made the college search and application process so much easier.
Five simple steps helped my family on our journey from 529 account establishment 18 years ago to college enrollment deposit day next week. I hope these also will help you on your path.
1. Take a Leap of Faith
While it wasn’t at all clear 18 years ago that it was feasible to establish and begin funding a 529 college savings account while my husband and I were still paying back our own undergraduate and graduate school loans, we nonetheless did. If we had thought too long or hard about our collective educational debt, about the soon-to-be new expense of full-time childcare or about rapidly outgrowing our small apartment, we would have never begun. While we couldn’t see clearly what the future would hold during those long days and sometimes sleepless nights of first-time parenthood, we followed our instincts about what would likely be needed down the road. And boy, are we glad we did.
2. Just Get Started
While we very easily could have, as we did with other decisions (about which car seat was safest, which baby monitor to choose and so on), we resisted laboring too long over the various 529 college savings program choices and the vast array of investment options within each plan. Instead, we made a selection that seemed right for us and started by depositing a small number of monetary gifts we received for Ben’s birth and baptism. Making the decision to get started and actually taking the time to do it, was by far the hardest step. In retrospect, the few minutes dedicated to establishing our 529 account was time very well spent.
3. Make it Automatic and Easy
As soon as I returned to work after maternity leave, I set up direct deposit from my bi-weekly paycheck. I knew there’d be little income left to spare with the many new costs associated with having a child, but I figured if money was automatically withdrawn from my pay and deposited into my college savings account, it would somehow be easier. With juggling work and motherhood, whatever else was added to my plate needed to be easy to stick with. And it was.
4. Get Others Involved
After we realized our home had become cluttered with too many toys, games and articles of clothing that were far too quickly outgrown, when asked for gift ideas, we began to politely suggest that well-intentioned friends and family forego traditional gifts and consider contributing to Ben’s college savings account. We received many sighs of relief from those who were running out of gift ideas and who truly appreciated the smart and easy suggestion. These thoughtful gifts have added up over the years and it’s been rewarding for others to feel invested in Ben’s academic pursuits.
5. Keep Spending in Check
Saving helped but not spending helped too. Driving the same automobile for 17 years, for instance, helped us spend less and thereby, save more. We jokingly say that our still reliable SUV will be responsible for getting Ben to college in more ways than one. It will, of course, literally get him there by transporting him to his college orientation in August, but it will also have gotten him there by allowing us to save some of what we didn’t spend on one or more new cars through the years.
Other actions, like getting rid of cable television, have made a difference too. Since we never seemed to watch the wide array of channels, it was Ben’s wise suggestion to cut the cord. That decision alone has saved us over $2,000 a year.
A Toast to Diligence
Fast forward 18 years and we can clearly see how these small steps have made a big difference. With this in mind, as we celebrate Ben’s hard work, college acceptances and thoughtful decision of which school to attend, we will also celebrate our decision to plan ahead for the position in which we find ourselves today.
About the Author:
Patricia Roberts has been a part of the 529 industry for over 17 years, serving as an attorney, product manager, state relationship manager, and currently, as chair of the CSPN Corporate Affiliate Committee.