“Was it really 4 years ago that we last talked?”
“Our 20 year high school class reunion is THIS YEAR?!?!!”
Time has remained constant, but as we grow up we get so busy that it really does appear that time flies by!
It was almost 7 years ago that my daughter was born. WOW! I can not hardly believe it. In just 11 years, she will be off to college. UNBELIEVABLE!
Wait a minute … Off to college … Have I started saving for that?
The answer for us is YES!
Here is what we have done to save for her college. We started up a 529 College Savings Plan. It was VERY EASY. I went to our local bank and asked to open a 529 College Savings Plan.
Facts about the 529 College Savings Plan I am involved in:
- They required a mere $50 minimum amount to open the account.
- Additional future contributions were required to be at least $25.
- They ZAP my bank account once a month with an amount I have told them to deduct.
- The money is invested in mutual funds that I have selected.
- The money is put in AFTER-TAX, but I am able to withdraw the money (principal PLUS interest) TAX-FREE for my daughters qualified educational expenses.
- I am ONLY allowed to contribute $298,770 to this account at this time (I suspect that this will pay for college 🙂 )
- Qualified expenses included tuition, fees, books, supplies, equipment, room and board.
- If I withdraw the money for non-qualified expenses, the interest earned is subject to income taxes PLUS a 10% penalty.
Do you know how easy it is to contribute a monthly amount to savings when you do not have to do anything? No writing checks. No on-line bill payment. Nothing. It is removed from my checking account automatically, and it is deposited into the 529 account automatically. It is then automatically used to purchase additional units of the mutual funds I have selected.
How sweet is that? Here is an example of what has happened to my 529 plan since it was started in 2003.