529 PLANS

Savingforcollege.com

Best 529 plan strategy? Use other people's money
http://www.savingforcollege.com/articles/20100611-best-529-plan-strategy-use-other-peoples-money

Posted: 2010-09-10 - Erin Peterson is a freelance writer based in Minneapolis.

by Erin Peterson

Parents face a daunting task as they save for junior's education. But if they're savvy, they don't have to do it alone. Friends, relatives and even corporations will kick in to help boost a 529 plan account balance.

You'll still need to be diligent about saving, but it's worth it to wring every last cent out of other sources, says Linda Pietroburgo, a principal at the Moneta Group in Clayton, Mo.

"You want to tap every resource that's available to avoid having to borrow," she says. "When it comes to college savings, it's all hands on deck. There's no reason not to get everybody involved in the effort."

Here are five strategies to get a little extra cash for your kid's 529 plans without denting your own bank account.

  1. Encourage 529 plan birthday and holiday gifts. If birthdays and holidays bring piles of toys that are quickly discarded, consider asking for less stuff and a little more for college savings. Sites such as FreshmanFund.com make the transaction easy. You simply send an invitation through the site, and donations are funneled to your account and then transferred to your 529 plan without anyone but you seeing the details.

    While Pietroburgo notes that these small gifts will add up over time, she adds that it's unwise to replace physical gifts with 529 plan deposits. "Especially when the child is young, it's probably smart to get a little model car or a Barbie doll to go along with the contribution," she says.

  2. Tap the grandparents. Grandparents are often eager to celebrate the birth of a new grandchild. Encourage them to start a 529 account for the new little one, and they can ensure that their gifts have an impact well into the future.

    "Not only is a 529 plan generally a better college savings vehicle than a savings bond, but it also can mean some immediate state income tax savings," says Pietroburgo.

  3. Register your credit cards and buy online through Upromise. There are several ways to take advantage of web-based Upromise's college savings programs. Upromise partners with retailers who contribute to people's college savings plans after they make purchases at those stores.

    If you make purchases online, you can head to Upromise's site and buy from one of 700 partner companies, including Walmart, Target and Saks. The prices are the same, but a portion of each purchase will be deposited into your 529 plan account. If you register your credit cards, you can even take advantage of offline deals at restaurants and grocery stores, where 15 percent or more of the purchase price may be pushed into a Upromise 529 plan account.

    According to according to Upromise spokeswoman Deborah Hohler in Newton, Mass., heavy users can save more than $200 a year. "If you're willing to take the extra step to see if there's an opportunity to buy something from a participating company, you can get quite a bit back on purchases you're going to make anyway," she says.

  4. Get a 529 rewards credit card. Instead of funneling all those credit card rewards into free flights or gift certificates, use them to build up the college fund. Two great options are the Fidelity Investments 529 College Rewards American Express Card, which deposits 2 percent of every purchase into a Fidelity-managed 529 plan account.

    The Upromise MasterCard offers 1 percent on all purchases, plus a 2 percent bonus for some gas purchases and 10 percent on certain grocery and drugstore purchases. Users can have the earnings deposited into a Upromise 529 plan account or request a check and put the money into other account, according to Hohler.

  5. Use the proceeds of friendly poker games. You've probably engaged in a few friendly wagers in your lifetime, whether it's a monthly poker night or putting a few bucks down on a March Madness pool.

    If you're lucky enough to come away a winner, you can use the cash to fund a 529 plan, says Peter Donohoe, a wealth manager at PRW Associates in Quincy, Mass.

    "Why not use it for something good instead of just buying yourself some new stuff? Write a check to your college savings account," he says.

Posted September 9, 2010

Parents face a daunting task as they save for junior's education. But if they're savvy, they don't have to do it alone. Friends, relatives and even corporations will kick in to help boost a 529 plan account balance.

You'll still need to be diligent about saving, but it's worth it to wring every last cent out of other sources, says Linda Pietroburgo, a principal at the Moneta Group in Clayton, Mo.

"You want to tap every resource that's available to avoid having to borrow," she says. "When it comes to college savings, it's all hands on deck. There's no reason not to get everybody involved in the effort."

Here are five strategies to get a little extra cash for your kid's 529 plans without denting your own bank account.

  1. Encourage 529 plan birthday and holiday gifts. If birthdays and holidays bring piles of toys that are quickly discarded, consider asking for less stuff and a little more for college savings. Sites such as FreshmanFund.com make the transaction easy. You simply send an invitation through the site, and donations are funneled to your account and then transferred to your 529 plan without anyone but you seeing the details.

    While Pietroburgo notes that these small gifts will add up over time, she adds that it's unwise to replace physical gifts with 529 plan deposits. "Especially when the child is young, it's probably smart to get a little model car or a Barbie doll to go along with the contribution," she says.

  2. Tap the grandparents. Grandparents are often eager to celebrate the birth of a new grandchild. Encourage them to start a 529 account for the new little one, and they can ensure that their gifts have an impact well into the future.

    "Not only is a 529 plan generally a better college savings vehicle than a savings bond, but it also can mean some immediate state income tax savings," says Pietroburgo.

  3. Register your credit cards and buy online through Upromise. There are several ways to take advantage of web-based Upromise's college savings programs. Upromise partners with retailers who contribute to people's college savings plans after they make purchases at those stores.

    If you make purchases online, you can head to Upromise's site and buy from one of 700 partner companies, including Walmart, Target and Saks. The prices are the same, but a portion of each purchase will be deposited into your 529 plan account. If you register your credit cards, you can even take advantage of offline deals at restaurants and grocery stores, where 15 percent or more of the purchase price may be pushed into a Upromise 529 plan account.

    According to according to Upromise spokeswoman Deborah Hohler in Newton, Mass., heavy users can save more than $200 a year. "If you're willing to take the extra step to see if there's an opportunity to buy something from a participating company, you can get quite a bit back on purchases you're going to make anyway," she says.

  4. Get a 529 rewards credit card. Instead of funneling all those credit card rewards into free flights or gift certificates, use them to build up the college fund. Two great options are the Fidelity Investments 529 College Rewards American Express Card, which deposits 2 percent of every purchase into a Fidelity-managed 529 plan account.

    The Upromise MasterCard offers 1 percent on all purchases, plus a 2 percent bonus for some gas purchases and 10 percent on certain grocery and drugstore purchases. Users can have the earnings deposited into a Upromise 529 plan account or request a check and put the money into other account, according to Hohler.

  5. Use the proceeds of friendly poker games. You've probably engaged in a few friendly wagers in your lifetime, whether it's a monthly poker night or putting a few bucks down on a March Madness pool.

    If you're lucky enough to come away a winner, you can use the cash to fund a 529 plan, says Peter Donohoe, a wealth manager at PRW Associates in Quincy, Mass.

    "Why not use it for something good instead of just buying yourself some new stuff? Write a check to your college savings account," he says.

Posted September 9, 2010

 

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