Is it just me, or is there anyone else who cringes when asked about their 5-year plan? 10 year? 15? Woof.
As a single mom in NYC – there’s just no real plan for life like that. Sure we plan and we save money “in case of” but you just never really know here. Things change so fast in this city it makes your head spin. One day you could buy a 6 million dollar home on Park Avenue, the next you could be sleeping in the subway cars while the rush hour crowd tries to ignore you.
Ok, so those are extremes, but really, while we have a plan, I won’t sit here say I hope I’m married and have a house and a dog in five years. That’s just not me.
But what I will say is, no matter the circumstances, in 12 years (let me take an anxiety pill for that reality), Max WILL go to college. Whether it’s Harvard or trade school to be an electrician, he’ll do higher education for whatever passion he pursues.
But that requires money. And in this day and age, A LOT of money. You can’t rely on scholarships (but all our sons are getting free rides on sports right?), so what is a working mom to do?
Fact: We started a 529 Fund when Max was still in my belly.
Time is always on your side. The sooner you start putting it away, the more you’ll have.
Fact: Anything is better than nothing.
You don’t have to put hundreds or thousands away every month. Even $20 is $20 more saved that you had yesterday. Just because you might not have the FULL amount of college saved by the time their 18 doesn’t mean that the $30,000 you did won’t help.
Fact: You can write off up to $5,000 as a single parent ($10,000 as a couple).
Did you know that all money earned is also tax-free? Tax savings, people – let your money work for your kids! Your earnings grow federally tax-deferred, qualified withdrawals are tax-free.
Fact: 529 can be used for anything that is higher education.
They don’t have to go to Penn State just to qualify. If your child grows up to be an artist and wants to go to art school, that counts. So do some trade and vocational schools. Hey – we still need auto mechanics and electricians in the world and that’s an ART. I mean, I know I can change my own SUV’s oil, but can you (not that I want to on the streets of NYC anyways!)? There’s still really good money in these careers so don’t think a 4-year degree in business is the only route. As long as the school is an ‘eligible education institution’ recognized by the state. You can check lists of schools here.
Fact: 529 funds can be used for more than tuition.
This earned money can be used for housing, books, meal plans etc. Even computers and software (if they end up going after that Journalism degree like mom).
Fact: Anyone can contribute.
I know opening gifts are A LOT of fun now, but them not getting student loan debt in 15 years is even better. The holidays are coming. Why not ask relatives to contribute to their 529 Funds this year instead of another toy that’s going to get tossed aside in a month? You can learn more about how to have them contribute here.
Want to learn more?
I am sure you have more questions – you can always reach out to ask about how we contribute to our own 529, or you can use some of these useful tools and links:
College savings planner (tool)
529 state tax deduction calculator
Disclaimer: Compensation was provided by NY 529 Direct via Momtrends. The opinions expressed herein are those of the author and are not indicative of the opinions of NY 529 Direct or Momtrends
Note: Investments in the plan are subject to risk. Before you invest, consider whether your or the beneficiary’s home state offers any state tax or other benefits that are only available for investments in that state’s 529 plan. The Comptroller of the State of New York and the New York State Higher Education Services Corporation are the Program Administrators and are responsible for implementing and administering the Direct Plan. Ascensus Broker Dealer Services, Inc., serves as Program Manager and, in connection with its affiliates, provides recordkeeping and administrative support services and is responsible for day-to-day operations of the Direct Plan. The Vanguard Group, Inc., serves as the Investment Manager. Vanguard Marketing Corporation markets, distributes, and underwrites the Direct Plan. No guarantee: None of the State of New York, its agencies, the Federal Deposit Insurance Corporation (FDIC), The Vanguard Group, Inc., Ascensus Broker Dealer Services, Inc., nor any of their applicable affiliates insures accounts or guarantees the principal deposited therein or any investment returns on any account or investment portfolio. New York’s 529 College Savings Program currently includes two separate 529 plans. The Direct Plan is sold directly by the Program. You may also participate in the Advisor Plan, which is sold exclusively through financial advisors and has different investment options and higher fees and expenses as well as financial advisor compensation. For more information about New York’s 529 College Savings Program Direct Plan, obtain a Disclosure Booklet and Tuition Savings Agreement at www.nysaves.org or by calling 1-877- NYSAVES.
