The Lake News Online
  • State Treasurer offers advice on saving for kids' higher education

  • Summer is coming to an end, and parents everywhere are preparing to send kids back to school. While it is easy to get caught up in the hectic preparations for the first day of school, it is also important to remember what all of this is for: preparing our children for adulthood. The world is changing around us, and we must ch...
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  • Summer is coming to an end, and parents everywhere are preparing to send kids back to school. While it is easy to get caught up in the hectic preparations for the first day of school, it is also important to remember what all of this is for: preparing our children for adulthood. The world is changing around us, and we must change with it. Now more than ever, some advanced training or a degree beyond high school is required in the workplace.
    While there are a variety of higher education options out there – community college, trade school, vocational school, a four-year degree – they can all be very costly.
    Saving for our children's higher education can be overwhelming, and at times it can seem like there is no way to save enough. I have put together a list of tips that focus on small investments which will add up over time to make an impact on those future costs. Even the smallest effort can make a big difference. Here are my top 10 tips to help make saving for higher education easier:
  • Start early and save regularly – Start when your child is young and add higher education savings to your monthly budget. Saving a little money each month over time adds up. For example, saving just $50 a month from birth would yield about $20,000 by the time your child is ready for college, assuming a 7 percent return on investment.
  • Open a MOST 529 account – For as little as $25, you can start an account with MOST–Missouri's 529 College Savings Plan. MOST helps take the guesswork out of picking an appropriate mix of stocks and bonds by offering age-based options. MOST chooses the funds based on your child's age and your risk tolerance. Regardless of the eligible higher education option your child chooses – a community college, trade school, vocational school or a university – withdrawals from a MOST 529 account can be put toward tuition, books and other qualified expenses.
  • Make saving and investing "automatic" – Make allotting part of your paycheck for higher education savings easy by setting up payroll deduction or monthly automatic bank transfers to your savings and MOST 529 accounts.
  • Ask for help – Holidays, birthdays and special occasions can be celebrated with more than a new toy. Ask family and friends to contribute to your child's higher education savings account.
  • Make a monthly budget – monitor what you spend for two months. Sit down and analyze your habits and prepare a budget. Look at what you need, what you want and those special splurges.
  • Consult a cost calculator – Though you may not be able to cover the entire cost, a higher education cost calculator can give you an idea of what you will need to save toward your child's education.
  • Set savings goals – Having a goal will help motivate you to save and help you stay on track.
  • Revisit your budget regularly – Make it a point to regularly review the amount you can save. For example, if you have a budget expense that decreases or stops, consider directing those funds to your higher education savings.
  • Involve your children – Encourage your children to put a portion of their money toward their higher education savings.
  • Check your investments regularly – Many college savings plans allow you to choose how you invest and provide news related to your college savings that may help you as you continue to save. Don't be afraid to change your investment strategies as your personal financial situation changes.
  • Page 2 of 3 - Studies show that when people are confronted with the cost of higher education, they often assume that they cannot save enough and decide to abandon saving for higher education altogether. Though it may not be possible to save enough to cover everything, this does not mean you should not save anything. It is possible to save enough to pay for a significant portion of the cost, and the rest can be handled by financial aid, work-study, a job and loans.
    Covering the cost is not the only goal of saving. By saving for your child's higher education, you also show your children you believe in them. Research shows that students whose parents saved for their education are more likely to complete a degree. Every child deserves the chance to pursue higher education and be successful. They should not be buried under a mountain of debt to do it. Talk to your children, be honest about what you can afford and help them understand the financial aid options as a family. By starting early, talking regularly and working together with small investments along the way, you can help your child reach their dream. To learn more about MOST–Missouri's 529 College Savings Plan and the options it provides, visit www.MissouriMost.com or call 800-992-8790.
    About MOST 529
    State Treasurer Clint Zweifel sponsors MOST 529, a tax-advantaged program that enables families to save for a child's higher education. MOST 529 is an affordable, low-cost, tax-deferred way to save for higher education expenses. Investments in the plan can be used towards many qualified higher education expenses, including tuition, certain room and board expenses, books and mandatory fees at most four-year colleges and universities, many two-year institutions and vocational schools, and some schools abroad. In addition, savings in MOST 529 can be used towards associate's, bachelor's, and advanced degrees. Account owners may deduct up to $8,000 in contributions each year in computing their Missouri state income tax and married couples filing jointly may deduct up to $16,000 annually. Contributions to the Plan in a tax year are deductible from Missouri state income tax up to certain limits, but may be subject to recapture in subsequent years if you make a nonqualified withdrawal.
    Investment returns are not guaranteed, and you could lose money by investing in the Plan.
    For more information about MOST—Missouri's 529 College Savings Plan, call 1-888-414-MOST or visit www.most529savings.com to obtain a Program Description, Privacy Policy, and Participation Agreement. Investment objectives, risks, charges, expenses, and other important information are included in this document; read and consider it carefully before investing. Vanguard Marketing Corporation, Distributor and Underwriter.
    If you are not a Missouri taxpayer, consider before investing whether your or the designated beneficiary's home state offers any state tax or other benefits that are only available for investments in such state's qualified tuition program.
    Page 3 of 3 - The Missouri Higher Education Savings Program (the "Program Trust") is a trust created by the State of Missouri. When you invest in MOST—Missouri's 529 College Savings Plan (the "Plan"), you are purchasing portfolio units issued by the Program Trust. Portfolio units are municipal securities. The Plan has been implemented and is administered by the Missouri Higher Education Savings Program Board (the "Board"). Upromise Investments, Inc., and Upromise Investment Advisors, LLC, serve as the Program Manager and Recordkeeping and Servicing Agent, respectively, with overall responsibility for the day-to-day operations, including effecting transactions. The Vanguard Group, Inc., serves as Investment Manager for the Plan. Vanguard Marketing Corporation, an affiliate of The Vanguard Group, Inc., markets and distributes the Plan. The Plan's portfolios, although they invest in mutual funds, are not mutual funds.
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