Financial Strength For Your Child's Future

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By Scott Oberholser Live in the now! To be healthy, physically and mentally, one, must do just that. When it comes to managing money, that may not always be the best advice. There is nothing wrong with splurging on certain purchases here and there. But consistently saving money is the only way to be healthy financially. Part of being financially strong is planning for the future. Setting money aside now that will be used in the future is a part of managing your money successfully. Specifically setting aside money for your child's education will not only make you financially strong, it will make you a hero.

And it does not take a lot of money to do so.

The 529 College Savings Plan- There is no better way to set aside money now to be used in the future for your child's education. If your child or yourself value a college education but don't consider it an option because of the price tag, fear not! A 529 Plan will allow you to set aside funds for future college costs starting right now. The benefits of saving through this plan are many.

Tax Benefits-Most savings accounts that provide for future income contain tax benefits. The college savings 529 plan is no different. First, any money that you put into this account will grow tax-free.

That means you are creating a savings account that earns interest without being charged a tax. Second, once your child uses the money for college costs, any distribution from the plan is also not taxed.

Because these plans are set up through individual states, your state may have additional tax benefits.

The only part of the plan and the money you contribute that does not include a tax break is the money you contribute to the plan each month.

Low Maintenance-After you have set up this account, making a monthly contribution may be the only action you need to take. Pretty simple. A 529 college savings account is managed by an independent investment company or your state treasury department. Although it varies from state to state, typically a initial contribution of $250 is required with monthly contribution of $50 to made thereafter.

Nationwide Use-Although you must set up this savings plan by state, the plan is available for at any college throughout the United States. Currently every state has a 529 college savings plan. So, your child may attend any school he or she wishes and be able to use the money you have saved in this account.

You are already a hero in the mind of your child. By setting up any of the 529 college savings plans, you will be a hero in your own mind. Heck, you are a super hero. Being prepared to financially strong enough to pay for a child's college education makes every parent a super hero!

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