By Nicolette Johnston, Public Information Officer, Nevada State Treasurer’s Office
August 22, 2016
It’s that time of year again! Summer is winding down, last minute vacations are wrapping up, and if your child hasn’t already returned to school yet, he or she will be within the next couple of weeks. Hopefully, as a parent you were able to relax a little bit this summer, but now it’s time to focus on what your youngster needs to be successful not only this year, but many years in the future.
I’m talking about saving for education costs after high school.
Perhaps you’ve heard about the various types of 529 college savings plans at back-to-school nights in the years past, but the brochures got pushed to the bottom of your priority list. Now is the time to start that savings account or add to the account you already have.
Here are a few tips to increase YOUR success at saving:
1) If you’re a bargain hunter and took advantage of back-to-school sales, consider contributing to your 529 plan an amount equal to the price reductions you reaped. Saved $10 by spending $30? Put that $10 in your account for another reward in the future. Check the bottom of receipts for a quick summary of your savvy savings.
2) Try to make compromises. Maybe their backpack does not need to be replaced every year? If their shoes still fit and are in decent condition, can new ones wait a few months? Explain to your student that you will put the cost of the backpack or shoes into a college saving account for their future instead.
3) Contributing regularly to your account is a best practice shared by many successful savers. Create a habit by establishing a realistic goal that your family is comfortable with adding to your account monthly. Give your contributions the opportunity to grow year-after-year with compounding interest until your child is ready to go to college.
Your student may be begging for the hottest fashion trends or flashiest tech product for their back-to-school wants (if they still don’t have Pokemon on the brain). But, it may be time to include them on a new strategy like ‘shopping’ for their future.
Set the expectation with your child that college is in his or her future and discuss what you’re doing to make sure you’re ready financially when it’s time. Explaining and modeling saving to your child teaches him or her the importance of higher education, how to make effective budgeting decisions and the art of discipline and sacrifice.
About the author: Nicolette Johnston is the Public Information Officer for the Nevada State Treasurer’s Office. She is a proud college saver for her two-year-old daughter Allison.