Last updated on March 30th, 2018 at 02:20 pm
starting a college fund for your child
Full disclosure: I am not a tax expert or a financial advisor. These are my opinions and if you have tax questions it is best to double check with an expert. I am merely giving you my two cents on my journey to starting a college fund for my kids.
College tuition has been increasing more and more every year, and by the time my kids are in college I can’t even imagine what the cost for 1 year’s tuition will be. This is why I started a Learning Quest 529 plan to save for my kids’ college. Here is everything you need to know for starting a college fund for your child:
Learning Quest 529
Learning Quest is an online way to start a college fund, so you won’t need a broker. You can handle everything online from the comfort of your home. What I like about Learning Quest is that you can start automatic contributions. I love everything automatic, because it is one less thing for me to remember! Another cool feature about Learning Quest is that it lets you decide how you want the money invested whether you want an aggressive portfolio (subject to large gains/losses), or a conservative portfolio (little to no gains/losses). Now, in order to open an account you do have to have $25 right away, but like most checking/savings accounts there is usually a minimum deposit to open an account with most banks and $25 isn’t much in the long scheme of things.
What can funds be used on?
This is where I love Learning Quest because they break it down for you so you know what you can use the funds on. According to Learning Quest, the money you save in a 529 plan can be used on tuition, books, school supplies related to college, and room and board. Also, as the picture above mentions, there were changes made to the Federal Tax reform in regards to what you can spend the money on. One thing I bet most parents don’t know when starting a college fund for your child is that you can use the money on K-12 expenses. I mean, how great is that?!
If you aren’t comfortable starting a college fund for your child via Learning Quest, you can also contact a financial advisor at a reputable firm like Edward Jones and they can help set up your college fund for you, but in all honesty Learning Quest is really simple to use, and has a phone number you can call if you get lost or have questions.
If you live in the United States, the money you put away into a college fund can be deductible up to a certain amount. Please see this link to determine your state’s allowed amount to deduct: https://www.finaid.org/savings/state529deductions.phtml
It really is a gift that keeps on giving, because you are helping your child but you also get to write off some of that contribution.
No matter how young or old your child is, it is never too late to start saving for their college! Starting a college fund for your child can be rather easy, and your kids will thank you for it someday. Don’t forget to share this article with all of your friends who also have kids, so they can start saving too! As always, thank you for reading, and please feel free to subscribe for more sweet advice from one mom to another.