5 ways to grow your 529 pot o' gold

http://www.savingforcollege.com/articles/5-ways-to-grow-your-529-pot-o-gold-739

Last March, total assets in 529 college savings plans reached a record $227 billion. Today, Americans have collectively saved over $247 billion in 529 plans - but just how big are individual balances? At the end of 2013, the average account balance was just over $19,500, which would cover about one year of college at today’s prices. So how does your plan measure up? Do you feel confident that your plan is on the right track to meet your family’s college savings goals? You can’t really depend on the luck of the Irish to get you there, but here are five ways that can help lead you in the right direction:

1. Automatic contributions

Is your 529 plan linked to your bank account? One of the most effective way to save money is to “set it and forget it” with automatic deposits. Many plans have minimum monthly contribution amounts as low as $25 so after a couple times you probably won’t even miss the money. Your pot o’ gold will also grow on it’s own due to the magic of compounding and tax-free earnings growth.

2. Deposit your tax refund

If you’re expecting a tax refund check this year, why not consider putting some (or all) of it toward your college savings fund? Any amount of money you can save today will grow over time and reduce the amount your child will have to take out in loans.

3. Take advantage of state tax deductions (if available)

Do you pay state income tax? If so, your state may offer a tax credit or deduction on 529 plan contributions. Most states offer these types of benefits to residents who use their home state’s plan, but seven states will give you a tax break no matter which plan you use.

4. Challenge yourself

Have you been participating in our 40-Day Saving Challenge? It’s easy; just keep track of every dollar you can save until April 5th. Based on this amount, estimate a realistic monthly savings target and set an automatic contribution in your 529 account for deposits going forward.

5. Enter to win!

Feeling lucky? Well it is St. Patrick’s Day after all! It’s also almost time for March Madness and we’re celebrating with a photo contest. Just post a favorite photo of you or your loved ones sporting your favorite college basketball team gear to our Facebook page. One winner will be selected at random and will receive a $250 scholarship and two fitbits.