Heading back to school is an exciting time for students and families, and the perfect time to start planning for students’ future education costs. The Education Plan® 529 education savings plan provides families with a mechanism to begin saving early to secure a solid foundation for their child's academic journey. According to US News & World Report, tuition and fees at universities across the nation have risen 134% in the past 20 years and are expected to continue to climb, making saving now an essential and vital part of back-to-school planning.
"With a 529 plan, families can tackle the rising costs of college and related expenses and reduce or eliminate the burden of student loan debt,” said Natalie Cordova, Executive Director of the Education Trust Board of New Mexico, the organization that administers The Education Plan. “While planning a budget for back-to-school shopping, it’s important to factor in saving for future education. Whatever you can set aside–whether it’s a monthly or yearly contribution–every contribution adds up, making investing in future education a strategic plan that enables students to pursue their dreams.”
5 Ways to Include a 529 Plan in a Back-to-School Budget:
- Begin with a family budget. Consider what extra funds you have each month and make a viable plan to contribute monthly or yearly to your child’s future education.
- Open a 529 account with any initial amount you are able to. There is no minimum contribution requirement, and you can make contributions whenever you choose.
- Inform friends and family members they may contribute to the account at any time, including celebrations like holidays and birthdays, giving the gift of a bright future.
- Research your tax benefits. Contributions to a 529 plan grow tax-free and withdrawals are tax-free when use for qualified expenses, and in some states, there are additional tax incentives for contributions.
- Utilize planning resources to stay on top of your account. The Education Plan offers tools and resources necessary to navigate the complexities of education financing, helping families make better informed decisions about future educational costs and savings options. Many online tools, including a glossary of terms, tax benefit information, a detailed FAQ, and a help center allow people to access information when it’s convenient for them.
“Flexibility is key when it comes to planning for education, and the funds saved with the 529 plan can be used for a wide range of educational expenses, including housing, books, electronics, and other related costs,” added Cordova. “This provides families with the freedom to allocate funds where they are most needed, making the educational journey smoother and more manageable.”
The 529 plan is designed to make college more accessible by reducing families' out-of-pocket expenses and reliance on loans. With flexible contribution options and access to a variety of helpful tools, this invaluable resource enables families to start investing at any stage in a student's life.
For more information on The Education Plan please visit www.TheEducationPlan.com.