By Michelle Winner, Director of Marketing, Maryland 529
It seems like the holidays and family traditions go hand in hand. For the past 10 years, my husband and I have spent Christmas Eve watching Elf with our two daughters, and we enjoy a family bowling match with my father the day after Christmas. I’m not sure how these activities evolved into a yearly tradition, but they are always filled with so much joy and laughter that I can’t imagine spending either day doing anything else.
Another tradition that may not sound as fun as watching a movie or playing a game is discussing our financial goals for the upcoming new year. Can we afford to take a family vacation? Are we anticipating any major expenses – replacing our roof, purchasing a new car, etc.? What is the health of our emergency fund should there be an unexpected job loss? While most of this discussion is between my husband and me, one thing we make sure we do with our daughters is to review their 529 plan account balances. We started including them in this conversation when they were in middle school and started talking about their “dream” colleges. We explained how we were saving for their future education with a 529 plan, but if the cost of the college they wanted to attend exceeded the balance in their 529 plan, they would have to take out a loan. While it was a somewhat simplistic explanation at the time, it was enough to help them understand the basic concept that you can’t spend more than what you have without consequences. When it came time for them to start applying to colleges, knowing how much money they had in their accounts helped them decide which colleges they could attend without incurring student loan debt, a burden they now see many of their friends shouldering.
So, as you spend the holidays engaging in your favorite family traditions, consider adding one more tradition: including your children in their education savings journey. Even if high school graduation may be years ahead for your children, it’s never too early to start teaching them the basics of fiscal responsibility. Not sure where to begin? Here are some resources to help get you started:
New to college savings? This article includes expert insights from a T. Rowe Price thought leadership director that can help you build your college savings plan strategy.
Money Confident Kids is a great resource for helping middle school and high school students learn and understand the basics of saving, spending, and investing.
The Federal Deposit Insurance Commission (FDIC), the Consumer Financial Protection Bureau (CFPB), and the National Credit Union Administration (NCUA) provide different types of free financial education materials for pre-kindergarten through college students.
Wishing you a happy and fiscally healthy New Year!
About the author:
Michelle Winner is the Director of Marketing for Maryland 529, a division of the Maryland State Treasurer’s Office that oversees the Maryland College Investment Plan, the Maryland Prepaid College Trust, and Maryland ABLE. Michelle also serves as Co-Chair of the Communications Committee for the College Savings Plans Network.