Gimme 5! Steps To Boost Your 529 Savings
Everyone’s budget is tight. Setting aside money for a goal, even if it’s your child’s higher education, can be a challenge. Ohio's 529 Plan, CollegeAdvantage, highlights five simple ways to automate your savings to help achieve your financial objectives.
1. Automate Contributions
CollegeAdvantage 529 Plan account owners tell us the easiest way to save is to automatically contribute money before you have a chance to spend it elsewhere. Therefore, to grow your 529 Plan effortlessly, sign up for Automatic Investment Plan (AIP).
With an AIP, you can set up recurring contributions to be made directly from your bank account. You can align your automated 529 Plan deposits with your paydays or set a monthly contribution schedule. Many account owners use AIP to contribute regularly to their children’s CollegeAdvantage accounts, no matter the amount. Even if you’re putting away the $25 minimum per investment option, it can add up! You can also ask if your employer supports payroll deduction for CollegeAdvantage.
2. Build Your Savings With Tax Refunds Or Disappearing Expenses
A federal or state tax refund can be a budgetary windfall. The average refund from a 2016 federal tax return was $2,697. Consider how much closer your college savings goal would be if you contributed some or all of your refund to your child’s CollegeAdvantage 529 account. Remember, the $4,000 Ohio income tax deduction isn’t a cap on annual contributions. Deductions for contributions over $4,000 can be carried forward to future tax years until fully deducted.
Another way to automate your savings is to add the money from disappearing expenses to your child’s 529 Plan. Disappearing expenses are those costs in your budget for a limited time span. For instance, daycare is a large disappearing expense for families. Once your child starts kindergarten, consider rolling over your former daycare costs into regular contributions to your Ohio 529 account. You won’t miss it and you are continuing to support your child’s educational needs. Other disappearing expenses include paying off a car or your own student loans.
Many account owners will also contribute a portion of an annual raise or bonus toward a CollegeAdvantage 529 Plan.
3. Set Goals And Watch The Progress
Ohio's 529 Plan offers many useful tools to help set your savings goal. Need help in determining how much to put aside each month? With our College Savings Planner, you can receive personalized saving information. After inputting your college funding goals and examining your total projected costs, you will receive an estimated monthly amount needed to meet your savings objective.
Already putting money aside in an Ohio 529 Plan? You can track your investment performance, see if you need to change your saving strategy as your child grows, or perform regular maintenance on your 529 account.
4. Let Others Help You Save Through Ugift
Family and friends want to give meaningful gifts for the milestones in your child’s life. You can ask them to consider contributing to your child’s 529 Plan in lieu of gifts for baby showers, birthdays, holidays, graduations, and many other special occasions. Ugift makes it simple for anyone to contribute to a CollegeAdvantage Direct Plan account; you just give your unique Ugift code to family and friends. The gift giver can make one-time or recurring electronic contributions at any time. If the gift giver is an Ohio taxpayer, they can deduct their own contributions from their Ohio taxable income. Their gift contribution needs to be made payable directly to the account, not to the child.
5. Save While Shopping With Upromise
With no cost to join, you can save even more money for college through Upromise. Connected with hundreds of America’s leading companies, your Upromise membership can earn you cash back as you shop online, dine out, and more. By linking your Upromise account to your CollegeAdvantage Direct Plan, your earnings can be automatically transferred on a periodic basis, subject to a $25 minimum. Upromise is an optional service available to CollegeAdvantage Direct Plan account owners.
These are five simple steps to help you reach your college savings goal. If you would like to read how others saved for their children’s college expenses, learn more at our blog. Ready to set up a highly rated Direct Plan account with CollegeAdvantage? Then go here.
Posted on March 03, 2017