This past Thursday I enrolled in a 529 college savings plan for my son. I am super excited about it! I don't know if it is because I am turning 35 next month or if there is some other reason that I am all gung ho about saving money all of the sudden. It just really dawned on me that I am in no way prepared for my children's college, retirement or any type of emergency because I have no money saved. I guess I should be kind of relieved that my daughter dropped out of school?? :/ I guess she is saving me money. That is sarcasm, people. If she was graduating from high school this year and planning on attending college next year I would be going crazy. I know we could apply for financial aid, but whatever wasn't covered, I would have no way of paying and I would not want to deprive her of going to any school that she wanted to go to in order to further her education. This is not our scenario though and although I am saddened by her decision to drop out, I am relieved that I do not have to either A.) tell her she cannot attend "that" school because I did not prepare for her future or B.) be stuck with a very large financial burden that I cannot afford right now.
At this time, my son is almost 3. I have roughly 14 years to save for his college education. A 529 plan is a great way to do so. It is like a 401k for college :) You open the account with a deposit, choose funds to invest in and hopefully watch your money multiply. You can add money as often as you like. I will be having a particular amount direct deposited from my paycheck twice a month. If investing makes you nervous, you can choose to just put the money in a savings account and let it earn interest. You have total control. The funds can only be used for your child's continued education... tuition, room and board, books etc. If your child decides not to go to college, you can transfer it to another child in your family, a sibling, cousin, niece, nephew, whatever. Or YOU could go back to school and use the money to further your own education. If neither of these are an option, you can withdraw the funds, but there are penalties for doing so.
Right now, if you live in Massachusetts and open a U.Fund 529 college investing plan with Fidelity with a minimum deposit of $50.00, you will receive a $50.00 gift card to Target from MEFA (Massachusetts Educational Financing Authority). You must enroll by December 31, 2011. Here is a link to the site.
Do yourself and your kids a favor and start investing in their future and then buy yourself a little something nice from Target as a reward :)
I hope everyone has a wonderful weekend!