One of the most important things parents often forget to do when they have children is to put money away for their education. Saving for college is not a topic that is often discussed when your kids are born. They don’t hand out a “How to Save for College?” guidebook in the delivery room. That is why I’m glad that my husband started a NY 529 Direct College Savings Plan for our children as soon as they were both born.
His philosophy is to take the money out for their college first before paying any of the bills or home expenses. He calls it “paying yourself first”, or in this case saving for our children’s future first. We agreed on an amount of money that would be comfortable to put away each month and it is automatically deducted from our checking account.
The NY 529 Direct College Savings Plan makes saving for college easy. The best part about it is that the contributions are tax deductible, the grow tax deferred, and when you need the funds for college the withdrawals are tax-free. Another great benefits to using the NY 529 Direct College Savings Plan is that friends and other family members can also contribute to your child’s 529 account. We can get the grandparents, Aunts and Uncles and other people involved in helping save for our children’s future.
When birthday’s, holidays, and other milestones come along, instead of giving gifts everyone can contribute to their NY 529 Direct College Savings Plan. Yah okay it’s not the same as getting a playstation or the newest fad toy out there but it is a gift for your children’s future.
When it is time for our kids to go to college we will be thankful that we thought ahead and saved rather than rely on student loans or the chance of getting a scholarship.
Now you may be thinking to yourself my kids are older or we can’t afford to save right now. Well that is so not true. It is never too late to start saving for college and there is always a way to find extra money to contribute.
For the NY 529 Direct College Savings Plan the minimum contributions are $25 or $15 per pay period via payroll deduction. This is not going to put a dent in your wallet. If you’re worried about things start off by putting the minimum amount away every month for the first 3 months ($25). Then every month after that increase the amount deducted from your bank account by $15 until you reach $160 per month.
By the end of the year the amount of your monthly contribution will have grown to $160 per month or $1920 per year thereafter. Multiply that by 18 years and you will end up with $34,560 in principal saved for your child’s college education. That amount doesn’t even include the interest that the money will be accumulating during those 18 years of savings.
Just think you will have started the account with only $25 and end up with so much more. I guarantee if you use the “pay yourself first” method for savings you wont even realize the money is missing from your budget. You will see it leave your account every month but it will be automatic. Eventually it will be just another part of your life just like income tax and social security deductions.
So what are you waiting for? Stop procrastinating and open up a NY 529 Direct College Savings Plan today.
Disclosure: This is a sponsored post. Regardless, All opinions are mine.
NY 529 Direct College Savings Plan Quick Facts