Financial Savings Month Is a Time to Invest in Future Opportunities
October is Financial Savings Month, an opportunity to think about the financial goals that matter most to our families. For parents, grandparents, and others looking toward a child’s future, education is often near the top of that list.
The cost of education can be significant, and preparing for it does not have to mean knowing exactly what a child will want to do right after high school. A four-year university may be the right choice for some students. Others may attend a community college, learn a skilled trade, or enter an apprenticeship program. The important thing is giving young people options when the time comes to choose their path.
That is one reason why saving early in a 529 plan can make a difference.
Setting aside even $25 a month can help families prepare for future education expenses and reduce the amount students may need to borrow later. Starting early also gives savings more time to grow. Just as importantly, making regular contributions can turn a large future expense into a more manageable, long-term goal.
529 plans are an important tool that parents, grandparents, and anyone saving for a child in their life can consider. While 529 plans are commonly associated with traditional colleges and universities, their potential uses are much broader than many people realize.
Funds can be used for qualified expenses at eligible two- and four-year colleges, universities, and vocational or trade schools. They can also be used for certain expenses associated with registered apprenticeship programs, opening another avenue for students who want to earn credentials while learning on the job.
Families may also be able to use 529 funds for certain K-12 education expenses, subject to applicable federal and state rules. These expanded uses reflect an important reality: education savings do not look the same for everyone, and families may benefit from having savings that can support several different paths.
Of course, saving for education is only one piece of a family’s broader financial picture. Families have different incomes, expenses, and priorities, and there is no single savings strategy that works for everyone. What matters is considering future needs, understanding the options available, and developing a plan that fits within the household budget.
Financial Savings Month is a good time to start that conversation. For a family with a young child, it might mean opening a 529 plan and making a first contribution. For others, it could mean reviewing an existing account, setting up automatic contributions, or encouraging grandparents and other relatives to contribute toward a child’s future education.
No one can know today exactly what path their child will choose in the future, but families can prepare so that when that decision arrives, finances are less likely to stand in the way.
Saving a little today can help create more choices tomorrow.
Roby Smith is the 26th State Treasurer of Iowa and is the administrator of the ISave 529 Plan and IAdvisor 529 Plan. He lives in Davenport, Iowa with his wife Kari and invested in a 529 Plan for each of his four kids. Learn more about ISave 529 at ISave 529.com.