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The New Year always rings in "Resolution Season." While you might be trying to slim down and firm up, be sure you’re also getting your college savings in shape. Whether you have a CollegeAdvantage account or are considering opening one, here are five things you can do to get your college savings on track.
1) Begin saving
You have kids and you know you want them to go to college. But where to start? It all seems so far away and overwhelming. Don’t be intimidated. CollegeAdvantage 529 is easy and smart. Just take the first step: start saving. Even small amounts can add up over time. No matter the age of your child, you will immediately begin reaping the benefits of tax-free growth with a 529 plan. Check out our microsite, dedicated to answering parents’ most frequently asked questions.
2) Separate and designate your college savings
Do you have a "rainy day fund" tucked away somewhere? Are you thinking you’ll fund your child’s college education with those emergency funds? Or part of your 401k (or other retirement)? Or by paying down your mortgage? Those are all wonderful financial products - for their own, specific purposes. But they all have tax consequences, and may not be there when you’re ready to use them for college. A 529 plan offers you a designated college savings fund with tax advantages. If you’re still saving for college in a taxable account or have some money earmarked elsewhere for college, a 529 account is a better way to save.
3) Set a goal
This doesn’t have to be a complicated exercise, but do decide if you want to cover some, half, most, or even all of your child’s college expenses. Most parents have their own college savings philosophy, shaped by their experiences and other financial beliefs. Make sure your college savings goals line up with your general financial philosophy.
4) Check your investment mix
Every year, consider the investment options you selected. Make sure that your selected portfolios and options continue to meet your savings goals and risk tolerance. If you want to make a change, log in to your account and go to "Allocation Management" to see your investment options. Also, you might want to view Investment Performance, which is updated monthly. We also offer a Price History tool that provides daily pricing of each of our investment options.
5) Use our account features
a) Make savings a habit- We offer the Automatic Investment Plan (AIP) so you can make automatic, regular contributions from any bank account. Just log in to your Direct Plan account and select "Automatic Investments" under Asset Management in the menu. Follow the online instructions. Many account owners use this plan to set money aside before they have a chance to spend it on something else.
b) Learn about and use Ugift®- Family and friends often look for significant, meaningful ways to celebrate holidays, birthdays, graduations, and other special occasions. With the CollegeAdvantage Direct Plan, you can get a unique Ugift code for each of your beneficiaries. The code can be shared with family and friends to allow them to make lasting gifts to your child’s college savings account. Without ever sharing your account number or your child’s social security number, anyone can contribute securely online. Read more about Ugift.
Posted on January 16, 2015