College Savings Continued…

Last week we determined, for most families, a 529 Plan provides an excellent choice for college savings. Now that we have a vehicle to utilize, when should you start savings?

The sooner you start, the less of a burden it may be, but keep in mind that it’s never too late to start saving.

Below are age-appropriate strategies highlighted by the *Annual Survey of Colleges 2009-2010 that you can put into place today to help benefit your loved one’s college savings plan for years to come.


  • Start saving from day one. The sooner you start, the better. You could be paying part of the bill with the interest that your money earns.
  • Consider 529 college savings plans that include automatic investing. This is an easy-to-implement process in which you have a pre-determined amount of money regularly withdrawn from your checking account. Then, it is automatically invested in your college savings plan. The result is a disciplined and focused approach that can deliver tremendous long-term benefits.
  • Plan for a lifetime of rising incomes. A sound strategy is to increase your contribution to a college savings plan every time your income increases. As your expenses change, see if you can add more to your college savings plan.
  • Encourage loved ones to give the gift that keeps on giving. When family members and friends celebrate your child’s birth, subsequent birthdays, holidays, and religious events, tell them about your child’s college savings account. Every monetary gift they give will be part of a legacy of learning.

Elementary School

  • Raise your contributions to your 529 savings plan every time your expenses are lowered. If your child was in daycare or a private nursery school, you can expect to save a sizable amount when kindergarten begins. To build your college savings, why not take a significant share of daycare costs and direct it towards a college savings plan?
  • Look for new opportunities to save when you become a two-income household. If you waited until your child entered kindergarten to become a two-income household, consider putting a portion of one spouse’s income into your child’s college savings account. You’ll be pleased that even a small amount has big potential to grow over time.

Middle School

  • Involve your child in the savings process. Encourage your child to put a portion of his or her allowance into a college savings plan. When relatives and friends give gifts for education, make sure your child is aware of its significant and enduring value.
  • Talk to your parents about estate planning and college savings. Talk to your Financial Consultant about how you can help your parents remove assets from their estate and help save for your child’s education at the same time. As we discussed last week, there is a special provision applicable to 529 plans allowing for up to five years worth of contributions at one time. This is $65,000 from each donor filing separately or $130,000 per beneficiary if the donors are married and filing jointly.

High School

  • Now is the ideal time to begin to involve your child in the savings process. Most likely, there will be money from a part-time job during the school year or employment in the summer. Soon your child will be able to contribute a sizeable portion of his or her income to a college savings plan.


  • Involve your child in the savings process. Encourage your child to contribute some, or all, of his or her high school graduation gifts toward his or her college education. Every contribution helps.
  • Continue to research financial aid options. Continue to work with your child’s financial aid office to make sure that you are not missing any aid opportunities.

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