Thursday, December 15, 2011

Saving for your kids' educations? Make your contribution BEFORE the end of 2011!

Last year I posted about the tax incentive for being involved in an Indiana 529 Plan for my kiddos.  If you haven't already opened an 529 College Savings Plan for your kids, DO IT TODAY!  A 529 Plan is a way to put money away for your kids' college education - it grows tax free, and they can use it for any accredited institution in the US when they go to school.  AND, in Indiana, and many states, if you contribute to a 529 Plan sponsored through your state, there is a tax benefit!  In Indiana, you get a 20% tax credit on your state taxes (up to $1000/year) for contributing to a plan in your state, meaning you're making 20% on the money you invest for your kids' education!  This is really a win-win folks!

Each state's plan is different, but if you sign up for Indiana's College Choice Direct 529 Plan you can contribute as little as $25/month, and OTHER folks (Grandparents, Aunt & Uncles, etc.) can also contribute toward the education plan.  My husband and I have committed to saving $50/month when we opened our boys' accounts, and when I started back to work last year we increased that amount to $100/month - it isn't much, but we feel good knowing that we're putting something away now, and praying compound interest does it's magic!  The $ we put away each month is automatically debited from our checking account, so we're committed to putting the money away so we don't have to even think about it/accidentally spend it on something else!  It was difficult at first with our budget, but now we don't even think about it and we're glad it is in place.  And, if we have any extra money (think Tax Refund), or if a Grandparent gives some money for birthday gift, you can make extra contributions throughout the year. 

Been thinking about doing this but haven't gotten around to it?  DO IT TODAY!  Make your contribution before the end of 2011 so you can get the tax benefit!!!!

For more info, see 
or if you're in a state outside Indiana, I suggest starting with (or just googling 529 Plans and your State's Name to find a qualified plan for your state). 

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