January 25, 2022
Although it may be hard to believe, I only paid $320 for tuition my first semester at the University of Iowa. Sounds unimaginable today, right? As higher education prices continue to skyrocket, building savings for the children in your life can feel like a daunting task. But with a 529 plan, saving is simple and easy. It may not be possible to save every last penny, but there are still steps you can take to have your children feel prepared to embark on their post-secondary journey.
Start saving early
Time flies. Before you know it, they’ll be throwing their graduation cap in the air and setting out to accomplish their dreams. Plan for it now, so you aren’t scrambling later. The earlier you start setting aside money, the more time you have to take advantage of the potential growth of your account.
Know it is never too late
It doesn’t matter how old your children are; any time is better than never to start saving. A dollar saved is a dollar they don’t have to take out in student loans. Even if you only save a small amount and cannot cover the full cost of tuition, the savings may cover other qualified education expenses such as textbooks and supplies.
A little goes a long way
Saving for education doesn’t have to be a financial burden! By investing a little at a time and doing so regularly, that first tuition bill won’t seem as intimidating.
Utilize recurring contributions
529 plans make it easy to save. With recurring contributions, you can set up your account to take money from your bank account on a set schedule. No effort required! Many employers offer payroll deduction, allowing you to allot a certain amount to be withdrawn from your paycheck each time.
Enlist family and friends
Building education savings doesn’t have to be a one-person job. Multiple 529 accounts can be opened for one beneficiary. This means parents, grandparents, aunts, uncles, friends, and even your neighbors can save for your children.
The best thing you can do to support your children’s dreams is to save for their future education. Keep it smooth and simple with a 529 plan. Along with the generous tax savings participants receive, there is also the knowledge you are helping a loved one accomplish their goals. What a great feeling!
About the Author: Iowa State Treasurer Michael L. Fitzgerald is the past chair of the College Savings Plans Network and the administrator of Iowa’s 529 Education Savings Programs, College Savings Iowa and the IAdvisor 529 Plan, with over $6.9 billion invested and more than $4.5 billion in qualified withdrawals.