‘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

Choose Words Carefully & Improve Business: A Lesson from the State Treasurer’s Conference

Conference sessions tend to blur together but not this one:  “New Word Order – It’s Not What You Say, It’s What They Hear.” Gary DeMoss from Invesco Consulting blew the doors off of the Treasury Management Training Symposium with a riveting 50 minute discussion on how financial institutions can obtain substantially better results by paying attention to the language they use with customers and prospects. Screen Shot 2016-06-21 at 8.43.40 AM For the skeptics out there, I don’t know Gary and have no relationship with Invesco so this is not an inside commercial message disguised as a social media tip.   It was simply one of those light bulb moments that I want to share with you. It was that powerful.

So what’s the secret?  Words matter. A lot.

Gary presented the science behind learnings with regard to word and phrase choices that make our customers receptive to our message — or angry.  None of us intentionally intends to infuriate our customers, but we might well be doing so unintentionally.

He handed out a deck of nine cards with words/phrases on the front and back, and asked us to signal the phrase or word we thought best registered with our customers.  Here are the pairs:

  1. Knowledgeable vs Experienced
  2. Minimize my losses vs. Maximize my gains
  3. Works as advertised vs. New and improved
  4. Financial freedom vs. Financial security
  5. Voluntary contributions to my retirement plans vs. Automatic contribution to my retirement plan
  6. Transparent fees vs. Straightforward fees
  7. Long-term strategy vs recovery strategy
  8. Diversified vs Not correlated to the market
  9. Investment Strategies vs. Investment solutions

Not one person in our entire group of more than 150 correctly selected all nine preferred words — in fact, half the group of financial professionals was knocked out after the very first pairing (which was not necessarily the one above — I likely mixed up the cards on the way home).  Only five people were left for the last pairings before they too were tripped up.   Thankfully, Gary said we’re not alone; only a handful of people over many thousands correctly identified all nine.  I’d like to meet at least one them to help me with next year’s NCAA basketball pool!

Here’s what I learned — Gary’s Four Ps when communicating financial language. Apologies if my cryptic notes didn’t capture all of the concepts but there’s enough here for you to consider.  If you need more (and I do), consider  his book “The Language of Trust: Selling Ideas in a World of Skeptics.”   My copy is in the mail.

  1. Positive and hopeful.  Words like “fees” make our customers angry.  Fees are everywhere and they raise the hair on everyone’s neck.  Avoid calling your charges fees at all costs.  In fact, “costs” are more palatable because they  don’t trigger those same negative reactions in consumers. 
  2. Plausible.  Consumers want credible messages in today’s world of the incredible.  “Financial Security” rings truer than “Financial Freedom.”  Financial freedom sounds unattainable for most but security is something customers understand.
  3. Plain English.  Enough with the technical jargon and phrases we financial professionals seem to relish.  The problem:  even the best dressed white collar types miserably flunked man-on-the street interviews asking about basic financial terms.   We may believe we know what our client’s know,  but many (most?) of our clients don’t understand or  misinterpret our language.   “Strategy” is more appealing than “solution.”  Good words include long-term, strategy and diversified.
  4. Personalized.   Customers want to know we’re thinking about them — not ourselves.  Use “You” rather than “I.”  Tell what your product does, not what it is and emphasize the benefits.

I already put this to good use in some material we’re providing to our customers. I hope you find it helpful too.  This session – among a group of generally very good sessions — certainly gave me plenty of food for thought on my way home.