General

Why You Should Give A 529 Plan For The Holidays

Everyone wants to give a meaningful gift — something that will make the receiver happy in the present and also enrich their lives in the future. People tend to think of gifts of books, music lessons and even donations to good causes as ways to find gift-giving meaning. There’s one kind of idea that is more meaningful anything any of these, though, even if it is frequently overlooked — a contribution to a kid’s college fund.

Why You Should Give A 529 Plan For The Holidays

Parents tend to be shy about it

If you’re a parent, it can be hard to find the courage to tell friends and family about making all gifts out in cash so that it might add up to a college fund. Many banks and other financial services have stepped in to help, though. They have started college fund registries for just such parents. Thanks to their advertising, college savings are quickly turning into a popular gift-giving vehicle today. Parents sign up for a 529 account such as the one managed by College Savings Bank in Arizona, open an account, and add the names of friends and families. The service sends out email invitations to everyone on the mailing list, sowing the seed of the idea.

There’s no real sacrifice

While it can be hard to get a kid to forgo all his gifts for college contributions, it can be easy to split gift money between 529 account contributions and regular gifts of the indulgent variety. While a $20 or $25 contribution may not seem like much today, it can amount to substantial sums over many years of wise investing by the 529 management company. The earlier a contribution is made, the larger the amount will turn into one day.

Parents forgo their own gifts

In many families, parents can’t bear to see their children do without the gifts and toys that they really want. Instead of asking friends and family to convert all gifts for their kids into college cash, then, they ask that they do so with the gifts coming to them. They feel that they are old enough to not worry about presents for themselves.

Taking the leap

A recent survey by a 529 management service found that 70% of parents consider money a suitable gifts for their children. Another survey by a bank found that 90% of grandparents hoped that their grandkids would accept college fund contributions as gifts. Unfortunately, people simply hang back in embarrassment on both sides. There is no need for shyness, though. Everyone does hope for the same thing. Nothing is as important as a college education, after all.