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Alternate Gift Giving: College savings account - YouTube
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well when kids wake up on christmas
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morning they want to see toys under the
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tree they want to see treats in their
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stockings but if you're looking to make
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a more meaningful impact on your nieces
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and nephews your grandkids perhaps it's
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time to think outside the box one type
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of gift that might not be as fun in the
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moment but will make a huge difference
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later on is a gift toward the cost of
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college here to talk to us about this is
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patricia roberts she's the author of
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route 529 a parent's guide to saving for
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college and career training patricia i
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know this year already we've been
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dealing with supply chain issues we've
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got delays going this is the type of
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gift that you really don't have to worry
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about getting delayed in the mail and
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it's going to be a long-term thing
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what's going on
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well we know that we are dealing with
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the supply chain and other issues this
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holiday season and it's a great idea to
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consider an alternative gift that's
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really an investment in a child's future
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we know that college and other forms of
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post-secondary education can be very
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very expensive and we also know that
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more traditional gifts while much loved
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the moment that they're opened are often
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outgrown in terms of size and interest
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over time and as a mom myself i know how
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quickly our homes can get cluttered
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so this is an idea to give a gift that's
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more meaningful in the long run and a
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contribution to a 529 college savings
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plan is a perfect way to do that okay so
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what is a 529 college savings account
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a 529 college savings account is named
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after section 529 of the internal
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revenue code and these are special
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accounts saving and investing accounts
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that when they grow in value the
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earnings are never taxed
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these are accounts that allow you to
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specify money or delegate money for
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higher education expenses
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every state or nearly every state
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including california has a 529 college
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savings plan and these are very easy to
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invest in call it california's plan is
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called scholar share 529
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okay this graphic you sent me is really
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helpful because it just kind of shows if
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you give you know 25 dollars twice a
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year how much that actually grows over
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time
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and that's right small amounts can add
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up so rather than giving a gift that
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depreciates in value this is one that
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can grow in value and even if five or
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ten family members give 25 or 50 dollars
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for a holiday each year and perhaps for
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a child's birthday these amounts can add
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up to ten thousand fifteen twenty
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thousand over time so it's a great idea
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to consider and there's uh three
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different ways that you can give a gift
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toward uh toward college break down
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those ways for me
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right and they're all very easy the
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first way is to set up a 529 account of
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your own for a future student in your
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life most people don't realize it does
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not need to be their own child it could
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be a grandchild or a niece or nephew you
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don't even need to be related to set up
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an account you typically need 15 minutes
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and 25 or even less to get started and
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it's a great way to start a tradition of
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giving for that particular child during
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holidays birthdays and other milestones
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the second way if you don't want to set
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up an account of your own is to ask the
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child's parents or anyone else in their
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life do they already have a 529 account
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established for that child most 529
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plans make it very easy for account
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owners to invite others to contribute
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often there's a simple code that can be
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used online or there's an address to
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which checks can be mailed
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and the last way to contribute is to
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give a gift card there are gift of
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college gift cards that can be
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contributed to future students they can
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be redeemed into most any 529 plan
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account and the gift cards you can then
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go ahead and put those in the stocking
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so that maybe there is something
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physical that the kid can uh can have on
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on christmas morning what age do you do
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you suggest people start doing this sort
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of thing
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well i think it is never too early to
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begin saving for higher education given
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the cost of it so even for an infant
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child or a child to be this would be a
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great gift or a child of any age
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whatever can be contributed towards
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those future expenses is that much less
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that a child will need to borrow and
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repay with interest so i would give a
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gift of education to a child of any age
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say again the name of the the 529
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accounts here in california so people
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can
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look that up for themselves
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sure california's plan which is an
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excellent one is called scholarshare 529
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i believe at scholarshare529.com
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online okay and so we will have all of
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this information on our website
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kron4.com of course uh as soon as the
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show is over so folks can get a little
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bit more information that way thank you
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so much for joining us patricia and
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talking to us about this because it is
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kind of that time to start thinking
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about what you're gonna get all those
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people on your list and this is like you
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said something that's not gonna they're
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not gonna outgrow this one
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that's right thanks for having me today
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noelle thanks so much we'll be right
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