Hi all! Sorry for the hiatus, the holiday season came in full force and we enjoyed every minute, hopefully catching some great moments to blog about. And one of those was an opportunity to learn about something new and give one of the best gifts you can give.
So it all started with new additions to our family. (Nope, we’re not pregnant!) But we did come across some new faces this holiday season, and they were very cute and cuddly. We gained a few people to our list of loved ones in the form of nephews and God sons. And we thought long and hard on what to give them as presents: diapers, toys, books, Lollacups?
Financial Freedom for the Future
In keeping with our own mantra, we asked ourselves, what would we have wanted back then if we knew what our goals were today? So a short time before Christmas, Bernadette suggested a state 529 College Savings Plan, a tax advantaged investment vehicle. This took me off guard and I exclaimed, “Perfect!” Why didn’t I think of this before?
“In 2013, seven in 10 (69%) graduating seniors at public and private nonprofit colleges had student loans. Nationally, the average debt for these graduates was $28,400, two percent higher than for public and nonprofit graduates in 2012, but there was significant variation by college: at nearly one in five colleges, average debt levels increased 10 percent or more.” -Project on Student Debt at The Institute for College Access & Success (TICAS)
I was trying to come up with tangible things that either the baby or the parents would use or something fun they normally wouldn’t buy themselves. Then realizing some of the numbers indicated above, a 529 Plan as a gift is not useful now but will prove it’s worth towards the child’s future. It’s not just a savings account with tax advantages, but it’s an investment portfolio (stocks, etc.) that is managed based on the beneficiary’s age and risk.
I did most of my research on various state plans and their cost and historical performance here: Savingforcollege.com and other related links within. Selecting a plan was quite overwhelming, so please do your research on all pertinent factors including overall costs, performance, local state tax advantages for the account owner, and flexibility for the beneficiary. Most plans offer regular paycheck deductions and provide for free gifting for others to deposit funds as well.
Again, thanks for reading and we wish you the best on your journey for financial freedom into 2015 and beyond. We look forward to sharing our stories with you.