‘Tis the season for College Savings: 3 Painless Holiday Tips

The year-end affords the opportunity to reflect and optimistically plan ahead. Use these three holiday hints to get started and by this time next year, you’ll be proud of your accomplishments. (…and don’t forget to clue in grandparents and other relatives to get a bigger bang for your buck!):

  • Check the couch for loose change – 2017 style:   I was riding the elevator with a woman who was reading Plan and Finance Your Family’s College Dreams and she offered one of the best tips I’ve heard:
    couch-money
    …find more than loose change in your checking account

    Check the automatic payments connected to your checking account and cancel those you don’t regularly use or need.   She found more than $75 per month – loose change in the couch, 2017 style.  Next year, her re-allocated spending will fill up a 529 college savings plan with nearly $1,000. It’s repurposed “found money” that has no impact on her current spending or life style. Brilliant. How much can you find?

  • Make the Gift of College a Holiday Present: 2016 was a breakthrough year for innovation to make savings in 529 Plans easier. According to the College Savings Foundation, 90% of parents said that online and other gifting options would make college savings easier – and their holiday wish has been fulfilled. These innovations come in many variations so finding options that work well for your family should be easy. The College Savings Foundation outlines the various opportunities, which include:
    • Online gifting and/or gift certificates and coupons that can be printed and presented as gifts – with the gifted amount automatically deposited into a 529 account.
    • Emailed invitations offering gift givers access to make a gift directly into a 529 account.
    • Customized web pages with family or beneficiary (student) specific information.
    • GiftofCollege cards available at Toys’R’Us and Babies’R”Us or from some employers allows gifts to be made into any 529 Plan offered in the country.
  • Use Credit Card “Cash-Back” Rewards to Fill up 529 Plans. Find a credit card linked directly to 529 Plans or be disciplined about depositing Cash Back Rewards from other cards into a college savings account. The great things about these programs is that they allow you to fill your 529 coffers as you go through your normal day: no behavioral changes are necessary. Just be sure to not roll-up big credit card bills that you can’t pay in full each month to avoid paying big interest that will easily wipe-out the amount you can save.
    • Credit Cards linked to College Savings. There are several credit cards that permit users to accumulate cash back rewards to be deposited into 529 account. Some of these programs include:
    • CollegeCounts 529 Rewards Visa Card offers 1.529% back for those with a 529 Account offered by Union Bank in Alabama’s 529 Program and the Illinois Bright Horizons.
    • Fidelity Rewards Visa Signature Card offers 2% cash back to certain Fidelity accounts including Fidelity managed 529 Plans.
    • The Upromise MasterCard offers a range of cash-back benefits depending on the products purchased and the merchant from which they were purchased.
    • Other Cash Back Cards. Even if your credit card is not directly linked to a 529 Plan, you could easily take some or all of those cash rewards and deposit them into a 529 Plan. Every bit helps!
    • Learn more: “Using a credit card to save for college” from New York Times Money Adviser.

Each of these will allow you to increase savings without changing any of your current spending or giving habits. Find one or more that work well for your family. Recruit grandparents, relatives and friends to help and you’ll accumulate a nice nest egg that will no doubt reduce the amount that might need to be borrowed for college later. A dollar saved today is better than one borrowed tomorrow!

Send your success stories and other tips to info@Inviteeducation.com as you plan, save and succeed in 2017.

Happy Holidays!

John Hupalo is the Founder of Invite Education and co-author of the recently released book: Plan and Finance Your Family’s College Dreams: A Parent’s Step-by-Step Guide from Pre-K to Senior Year

College worries your customers: Here’s Why & What you can do to help them

When it comes to finances, what do you think are the two biggest areas of concern for adults with children?

Here’s what an April 2015 Gallup poll said:

  • More parents worry about how they are going to pay for college than they do about their own retirement.
  • 73% of those surveyed said they worry more about college than their retirement.
  • Even parents making $100,000 or more are worried.   61% said they were worried about having enough money to pay for their children’s college.

Grandparents are also worried and are helping their grandchildren like never before.  A 2014 Legg Mason study:

  • 2/3 of grandparents whose grandchildren are planning to attend college in the future are chipping in to financially support their education.
  • Nearly 40% contribute to the costs for grandchildren currently in college.

Why is everyone worried?

  1.  They may still have their own student loan debt and are concerned about how to help their children.  In 2013,  seniors age 65 and above totaled $18.2 billion, a 650 percent increase from $2.8 billion in 2005.  On the other end of the spectrum, Fidelity’s 9th Annual Study for College Savings told us that56% of Millennial parents are still paying on student loans.
  2. The sound bites and statistics are scary.  By the end of 2015, student and parent college debt rose to almost $1.3 trillion.  The average debt for students graduating with a bachelor’s degree is $37,000.According to the Brookings Institution, the typical new graduate is likely to devote 14% or more of his or her paycheck to student loans. For those with fine art or therapy degrees, it’s closer to 20%.
  3. The cost of college continues to increase.  According to the College Board, the average cost of a four-year, private college, including room and board has climbed 53% in the past 10 years to $43,921. Many cost over $65,000.  But it is also true that many are priced far below the average. And the sticker price is not what families usually pay.
  4. Parents feel overwhelmed and guilty that they are not doing enough to help their children.  Few feel that they can save enough.  So they do nothing.

Here’s what you can do to help them:

  1. Be the source and conduit for factual information, tools and services to empower families to take action: Here are some important — and often overlooked — points:
    • Saving for college will likely be only one part of the total college financing plan — but is the element that can be acted upon very early in the life of a child.  Saving a little now can have a significant impact later.  Read about how the “Rule of 70” simplifies compound interest for your customer’s needs.
      • 529 College Savings Plans are very effective for  many families:
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        Learn More: Contact Invite Education

        529s are very flexible; provide tax advantaged savings; permit grandparents, parents and others to contribute to to each child’s college savings plan; allow up to five years of gifting up- front and offer penalty-free opportunities to switch beneficiaries.

      • Currently, there are more than 12 million 529 accounts open in the U.S. with over $250 billion — that’s 1/4 of a trillion dollars — saved for college.  So we’re making some good progress in the savings area.
  2. Leverage Invite Education’s platform to provide a value added service to your customers while growing assets under management and cross-selling products to grandparents, parents and students

Invite Education’s College Center is a cloud-based tool that is seamlessly added to your public web site or to select clients who need the most help.  You likely do not have the expertise on staff to update and keep college related information current and fresh.  Invite Education offers a complete planning platform that’s perfect for families managing the college process as early as Pre-K all the way to senior year of high school.

Younger families are guided to a savings plan that is right for them to help families take control of their future plans. Along the way, as the student progresses grade by grade, admissions and testing criteria are highlighted in preparation for the academic competitiveness involved.  As college nears, scholarships and financial aid are highlighted along with cost analysis and comparisons to help finalize school choice.  Finally, after all other funding avenues have been secured, student lending insight is provided to help families make wise decisions about debt.

It’s good business to help your customers — and their children, (aka your future customers!) — with this very critical need.