COLLEGE SAVINGS 101

Savingforcollege.com

6 holiday gift ideas to fund 529 plans
http://www.savingforcollege.com/articles/20091211-6-holiday-gift-ideas-to-fund-529-plan

Posted:2009-12-11 - Erin Peterson is a freelance writer based in Minneapolis.

by Erin Peterson

'Tis the season for presents piled high, stockings stuffed with St. Nick's gifts, and maybe -- just maybe -- a little bit of holiday cheer for the 529 college savings account, too. After all, those electronic gadgets will soon become obsolete and the designer clothes won't fit this time next year -- but contributions to a child's education will grow more valuable over time.

If you're savvy, you might be able to get a bit more bang for your buck this year, says Laurel Alberty, president of Alberty Financial Planning Services in Atlanta, Ga. "We're in tough times, so people are looking for new avenues to get these accounts funded," she says. "There are a number of options." Here are just a few ideas:

  • Send invitations. Many parents are reluctant to ask for 529 account gifts, but sites like FreshmanFund.com and Ugift can help do the asking. Send out e-mail invitations to friends and family, perhaps along with Jane and Johnny's mile-long gift lists, to remind them that the 529 option is available. Many grandparents are especially eager to help out grandkids, and this can be a great way to encourage it, says Angela Baier, a spokeswoman for CollegeInvest in Denver, Colo. "It's not unlike in days past where grandparents would give a savings bond. This is today's way of doing the same thing," she says.
  • Ask friends and relatives to split their gifts. You don't need to blow the entire holiday budget on toys. If you've got friends or relatives who are happy to shell out, say, $50 for your child's gift, ask them to spend half as much on a toy and write a check for the other half to the child's 529, says James White, president of J.H. White Financial Services in Pottstown, Pa. "I wouldn't advise giving gifts only to a 529 -- but (splitting a gift) can teach kids an important lesson about the value of an education. These contributions can be viewed every statement as a gift that keeps on giving."
  • Ask for a gift to a child's 529 account -- for yourself. If you can't bear to see junior go without the latest Xbox World Demolisher game, consider asking relatives to direct the 529 gifts to you -- especially if you don't need a new tie or bath soaps. "A lot of times, relatives just want to see the kids getting toys, so if they can give (to the child's 529 account) through the parents, they might feel better about it," says Alberty." And parents, in general, would much rather have the financial stress taken off of them."
  • Buy through Upromise. The Upromise registry is an easy way to add a few dollars each month to a 529 account at no cost to you, says White. "Companies from Target to L.L. Bean lend their support to Upromise," he says. "If you buy something from their store through the Upromise site, a percentage of that purchase is put into a Upromise account, which in turn goes to a 529." For those with a big holiday shopping list, purchasing through the registry can mean a healthy boost during the holiday season. As an additional incentive, many retailers increase their contributions for those who buy through the Upromise site during November and December. White says that over the past several years, he's added about $1,000 to his two sons' 529 accounts solely through Upromise purchases.
  • Redeem those extra credit card points. If you've got points languishing on your credit card, there may be no better time than now to redeem them for cash and park the money in a 529 account. When sweeping new credit card regulations go into effect soon, card companies may reign in rewards or make them more difficult to redeem, so make the most of them now and help fund your child's education.
  • Research your state's 529 tax breaks. November and December are the peak season for 529 contributions, according to Baier. "In Colorado, historically, contribution numbers double in December," she says. Perhaps people are thinking about the holiday season, but they may also be trying to take advantage of tax credits and deductions. More than 30 states offer some sort of income tax break on 529 contributions. If you itemize your taxes and want to get more bang for your 529 buck, contribute by Dec. 31 to take advantage of the perk when you file your 2009 tax return. "You can give a great gift, and you get to write it off as well. You can't say that about a truck or a game for the Wii," says Baier.

Posted December 11, 2009

'Tis the season for presents piled high, stockings stuffed with St. Nick's gifts, and maybe -- just maybe -- a little bit of holiday cheer for the 529 college savings account, too. After all, those electronic gadgets will soon become obsolete and the designer clothes won't fit this time next year -- but contributions to a child's education will grow more valuable over time.

If you're savvy, you might be able to get a bit more bang for your buck this year, says Laurel Alberty, president of Alberty Financial Planning Services in Atlanta, Ga. "We're in tough times, so people are looking for new avenues to get these accounts funded," she says. "There are a number of options." Here are just a few ideas:

  • Send invitations. Many parents are reluctant to ask for 529 account gifts, but sites like FreshmanFund.com and Ugift can help do the asking. Send out e-mail invitations to friends and family, perhaps along with Jane and Johnny's mile-long gift lists, to remind them that the 529 option is available. Many grandparents are especially eager to help out grandkids, and this can be a great way to encourage it, says Angela Baier, a spokeswoman for CollegeInvest in Denver, Colo. "It's not unlike in days past where grandparents would give a savings bond. This is today's way of doing the same thing," she says.
  • Ask friends and relatives to split their gifts. You don't need to blow the entire holiday budget on toys. If you've got friends or relatives who are happy to shell out, say, $50 for your child's gift, ask them to spend half as much on a toy and write a check for the other half to the child's 529, says James White, president of J.H. White Financial Services in Pottstown, Pa. "I wouldn't advise giving gifts only to a 529 -- but (splitting a gift) can teach kids an important lesson about the value of an education. These contributions can be viewed every statement as a gift that keeps on giving."
  • Ask for a gift to a child's 529 account -- for yourself. If you can't bear to see junior go without the latest Xbox World Demolisher game, consider asking relatives to direct the 529 gifts to you -- especially if you don't need a new tie or bath soaps. "A lot of times, relatives just want to see the kids getting toys, so if they can give (to the child's 529 account) through the parents, they might feel better about it," says Alberty." And parents, in general, would much rather have the financial stress taken off of them."
  • Buy through Upromise. The Upromise registry is an easy way to add a few dollars each month to a 529 account at no cost to you, says White. "Companies from Target to L.L. Bean lend their support to Upromise," he says. "If you buy something from their store through the Upromise site, a percentage of that purchase is put into a Upromise account, which in turn goes to a 529." For those with a big holiday shopping list, purchasing through the registry can mean a healthy boost during the holiday season. As an additional incentive, many retailers increase their contributions for those who buy through the Upromise site during November and December. White says that over the past several years, he's added about $1,000 to his two sons' 529 accounts solely through Upromise purchases.
  • Redeem those extra credit card points. If you've got points languishing on your credit card, there may be no better time than now to redeem them for cash and park the money in a 529 account. When sweeping new credit card regulations go into effect soon, card companies may reign in rewards or make them more difficult to redeem, so make the most of them now and help fund your child's education.
  • Research your state's 529 tax breaks. November and December are the peak season for 529 contributions, according to Baier. "In Colorado, historically, contribution numbers double in December," she says. Perhaps people are thinking about the holiday season, but they may also be trying to take advantage of tax credits and deductions. More than 30 states offer some sort of income tax break on 529 contributions. If you itemize your taxes and want to get more bang for your 529 buck, contribute by Dec. 31 to take advantage of the perk when you file your 2009 tax return. "You can give a great gift, and you get to write it off as well. You can't say that about a truck or a game for the Wii," says Baier.

Posted December 11, 2009

 

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