Every parent wants to give their child a strong start, and saving for their education is one of the most meaningful ways to do it. Starting a direct-sold 529 plan is simpler than you might think: you choose a plan, open an account online with your child as the beneficiary, set up your contributions, and pick how your money is invested. 

With The Education Plan®, you can do it all in about 15 minutes with no minimum dollar contribution to start an account. As families gear up for a new school year, it’s the perfect moment to set up a different kind of school supply: a 529 education savings plan that can grow  with your child. Here’s a step-by-step guide to get started.

Step 1: Get Your Information Ready

Back-to-school season is all about checklists, so start with a quick one. Opening an account is fast, and having a few details on hand makes it even smoother. You’ll need: 

• Your Social Security (SSN) number or Taxpayer Identification Number (TIN)

• Your address

• Your child’s or the beneficiary’s name, birth date, address and SSN or TIN 

• Your bank account information (if you want to make your first contribution online; you can also send in a check after the account is opened)

That’s it. There’s no minimum income to qualify and no complicated paperwork. The Education Plan is New Mexico’s direct-sold 529 plan, which means you set it up yourself, without the need for an advisor.

Step 2: Open Your Account Online

Once your information is ready, opening the account takes about as long as packing a lunchbox. You can open an account online in roughly 15 minutes. During sign-up, you’ll likely name yourself as the account owner and your child as the beneficiary. Decisions on how much to contribute to your 529 can be made later if you need time to decide; the most important step is opening the account. A little today really can go a long way, and starting now gives your child’s savings a valuable tool: time to grow.

Step 3: Choose How Your Money Is Invested

Next, decide how your contributions are invested. The Education Plan offers a range of investment options, including age-based portfolios that automatically shift toward more conservative choices as your child gets closer to graduation (or when the money will be expected to be taken out or withdrawn). Prefer to choose your own mix? You can do that, too. And while all investments can rise and fall in value, a long time horizon is one of the biggest advantages when saving for a goal that’s years away.

Step 4: Make It a Habit, and Invite Others to Help

Studies show that when people automate saving, they usually save more. The Education Plan allows you to set up recurring contributions so saving becomes a habit. It’s one less thing to put on your to-do list. 

You can also invite grandparents, aunts, uncles, and friends to chip in through Ugift®, which lets loved ones contribute to your child’s account for birthdays and holidays. It’s a meaningful alternative to one more toy or other gifts that become unused over time. New Mexico taxpayers can deduct contributions to The Education Plan 529 account(s) from their state taxable income. New Mexico is one of only a handful of states that offers an unlimited state tax deduction for 529 contributions.

Step 5: Know What Your Savings Can Cover

Here’s the part that surprises a lot of parents: the funds in a 529 can be  used for a wide range of qualified education expenses, including tuition, books, supplies, computers, trade and vocational school, apprenticeships, K-12 expenses (up to $20,000 per year, per student), and even professional credentialing. Whatever path your child takes after this school year and the ones to come, their 529 can help. And if plans change, options are flexible. For example, you can change the beneficiary to another family member or roll up to $35,000 into a Roth IRA for your child down the road.

Start the School Year by Starting Their Future

This fall, while you’re checking off backpacks and notebooks, add one more item to the list, one that can keep paying off long after the school year ends. Starting is easier than you think. You can open an account in just 15 minutes, with many flexible contribution options. Give your child a head start this school year. 

This information is for general educational purposes and should not be considered financial advice or tax advice. We recommend consulting with a tax professional or financial advisor for personalized guidance.