The school year may have ended, but saving for college should be a year-round effort, according to State Treasurer Clint Zweifel.
Zweifel was at Crown Center last week to celebrate 529 College Savings Day and MOST–Missouri’s 529 College Savings Plan by reading to children and providing college savings tips to parents.
“Saving for college can be daunting, but there are simple steps parents can take to make it a bit more manageable,” Zweifel said. “Plans like MOST 529 give parents options and allow them to prepare for whatever educational path their child chooses.”
Zweifel provided the following top three tips for parents preparing to save for college:
nStart early. Saving a little money every month over time adds up. For example, saving just $50 a month from birth to 18 years of age would yield about $20,000 by the time your child is ready for college, assuming a 7 percent return on investment. (This hypothetical illustration does not represent the return on any particular investment.)
nSave regularly. Consider making saving an “automatic” event through payroll deduction or monthly automatic bank transfers.
nMake MOST 529 part of your larger plan for college savings. Though you may not be able to cover the entire cost of your child’s higher education, MOST can help you start saving. MOST takes the guesswork out of picking the right mix of stocks and bonds by offering age-based options. The aged-based options choose the funds based on your child’s age and your risk tolerance.
Zweifel also encouraged parents to talk to their children about finances early.
“Financial literacy is something we should begin teaching our children in preschool,” Zweifel said. “Understanding the value of money, how our spending affects our options and the importance of saving are all lessons that parents can begin teaching at home.”
More than $2 billion is invested in more than 140,000 MOST 529 accounts, each an all-time high. Getting started is easy–– Missourians can start an account with as little as $25. MOST 529 accounts offer multiple tax benefits, as well. Contributions may qualify for tax deductions. A wide range of low-cost investment options are available.