My time spent at P. Allen Smith’s Moss Mountain Farm wasn’t all fun and games – though both fun and games occurred. Our mission was to learn more about AR529 and better prepare our children for college by preparing our college savings fund.
Before I tell you about this awesome plan let me begin by saying you do not have to live in Arkansas to take advantage of it (though it is preferred).
How many of you already have a college savings plan started for your children?
If you were looking at me right now, my hand would not be raised. My reasons fall right in line with others who have not started a college savings plan for their children yet:
– I always thought I had to begin with a large amount of money
– I have trouble finding the “extra” money
– I hope my children will get scholarships
– I always thought my children could take out loans
– My children are still young and we aren’t thinking about college much
Did you know that the average savings rate for college savings is -2%. People are going into debt rather than saving for college. In the grand scheme of things what is more important, that $45 pair of jeans, or that textbook for college classes?
Once I started receiving the bills for my own college loans I realized that that was not the way to go. I do not want my children to attend college on a “free ride loan” that they have to pay back with frightening interest rates. Think about this for a minute:
“Every dollar you save earns you money, while every dollar you borrow costs you money.”
Finding the extra money to save could be as simple as not eating out once a month, or not getting that Starbucks once a week. As your child grows from a baby, convert the money that you were spending on them (diapers, formula, etc) into savings.
Don’t rely on scholarships. They are not guaranteed, and your child’s school of choice might not accept that athletic scholarship they received.
AR529 is a college investment plan offered by the State of Arkansas that can be used to obtain education (and educational related expenses) at any eligible institution in the US and abroad.
The amount needed to start an AR529 plan is very minimal.
As long as the funds are used for educational purposes, you will not be taxed. If the funds are used for non educational expenses then you will be taxed only on the earnings.
Arkansas residents are not charged an account fee.
Any contribution made to the AR529 plan, up to $5,000 individually or $10,000 for a married couple is tax deductible in the state of Arkansas.
You can chose an automatic transfer of funds, or pay into it when it is convenient for you.
You may transfer the funds from one child to another.
Anybody can contribute to your child’s AR529 plan.
There is no age limit on using the funds.
You may change the designated beneficiary at any time.
The assets are allocated based on your child’s age.
The AR529 plan currently has over 12,000 plan holders which cover over 22,000 children.
There are over $3,000,000 in accounts.
There are ways to maximize your AR529 Plan.
Have a college degree plan in place spelling out your child’s career goals. Knowing what your child wants to be will help avoid taking unnecessary classes.
Take advantage of community colleges. They offer many career choices and can cost a fraction of what a four year university would cost.
Begin NOW. Remember, you do not have to have a large amount to begin and the sooner you start, the better off your child’s college future will be.
Do you have a 529 Plan in place for your children?
*I received no compensation for this post. All opinions stated within this post belong to me. I will not receive anything if you sign up.