The right time for SMART529

A financial empowerment blog from the West Virginia State Treasurer’s Office

Transitioning from the slower pace of summer vacation to the hustle and bustle of a new school year can be overwhelming. It can be easy to get caught up in the new routine of homework and after school activities. The days turn into weeks, and then soon you are a few months into the school year.
With each new school year, we realize how quickly time flies. Elementary school students soon become middle school students, who soon become high school students. Then before you know it, you have a high school graduate! What comes after graduation may vary for each child, but it’s important to be prepared whatever path your child may choose.
That’s where SMART529 can help. This savings plan is designed to help you maximize your savings potential as your child grows. Of course, the earlier you start, the more you can save. If you have a new addition to your family, now is the time to start an account. Take advantage of the SMART529 Bright Babies program where you can get $100 invested in your account when you open a SMART529 before your child’s first birthday or the first anniversary of an adopted child’s gotcha day. By saving the first five years of your child’s life, you could potentially add more than $16,000* to a SMART529 plan.
If your children are already in school, not to worry, it is never too late to start saving for your child’s educational expenses. Remember, every dollar in savings is one less dollar needed in student loans. So, every little bit does help! Plus, there are ways to catch up or add to your savings if you missed an early start.
Some saving ideas to consider include:
• Making larger monthly contributions.
• Asking loved ones to consider buying a smaller gift for birthdays or holidays and use additional money to contribute to your child’s SMART529 plan.
• Taking any bonuses or extra money like rebates and tax returns and put those directly in savings. (Speaking of taxes… did you know that West Virginia residents receive a state tax benefit for all contributions to a SMART529 account?)
Whether you start your SMART529 account when your child is a baby, or when your baby is in high school, saving for higher education is never a waste. Even if you don’t save enough to pay for all school expenses, just think about the extra costs you can offset like books, supplies, room and board.
Your SMART529 savings will never go to waste, even if your child decides college isn’t the right path. Maybe your child prefers to enroll in a cosmetology program or wants to train to be a mechanic. You are still be able to use your SMART529 savings to cover many of those expenses. You can use this tool to determine if the institution your child is considering is eligible for 529 purposes.
So parents, here is your homework assignment: take time to sit down and learn more about SMART529. Meet with an investment planner, or do some research and set up an account on your own. Either way, take action! Even if you already have a SMART529 account for your child, it never hurts to take a moment to review your investment options and make changes as necessary. And don’t forget to take advantage of the suggestions listed above to maximizing your savings!

*Assuming a $100 a month contribution with a 6% return rate.