2 Ways To Save For College
By Michelle P. Sharrow, MBA
September is College Savings Month across the United States. With the average yearly costs to attend a public college soaring above $5,800 and $22,000 at a private one, it is important for those with young children to get a jumpstart on saving to meet their future educational needs. This month's column provides two simple ways for you to do just that-- 529 Plans and Upromise.
529 College Savings Plans
The 529 Plans provide an easy way for families to save for their children's future educational needs. Why is it called the 529 plan? Because it is named after the corresponding section, 529, of the Internal Revenue Code that defines how the plans are treated for tax purposes.
Each state now offers at least one type of 529 plan and many higher education institutions also offer plans. Families can contribute a one-time amount or sign up for automatic deposits. Earnings which are based on the stock market performance of the underlying investment, typically mutual funds, grow tax deferred. The 529 College Savings Plans can be used to cover tuition, fees, room and board, books, supplies, and related equipment. Also there are no income or age limitations affecting your enrollment in the plan and funds can be transferred from one family member to another. Low minimum contribution levels make the plans affordable for all families regardless of their income levels. Lastly, funds can be used at any higher education institution in the United States.
You can learn more about 529 College Savings Plans and the type best for you by visiting the Saving for College website .
Another way for you to budget for your children's future education expenses is through Upromise.
Upromise is a unique way for you to earn and save money towards your children's future educational needs through your every day purchases. Since 2001, Upromise, through partnerships with merchants, has been allowing participants to earn between 1 percent to 25 percent of the money spent on everyday items and services purchased in traditional stores or online. By simply signing up at the Upromise website, you can start saving today. You simply register your name and contact information, credit card or debit card, and other grocery store or store reward cards to begin earning your rewards. Upromise even goes a step further by allowing you to roll your rewards over into a 529 College Savings plan that you are already own.
It is important that we get a head start on saving for our children's college education. The beginning of the school year is the perfect time to do so. The 529 College Savings Plans and Upromise rewards program are just two unique ways in which families can easily plan to meet those needs.
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Michelle is a freelance writer based in Waldorf, Maryland. Her areas of expertise include finances and parenting. .
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