Another school year in the books! This year looked different, but we somehow did it and everyone is passing on to the next grade and excited to get back to the actual classroom! It also means we are one year closer to graduation and that’s a scary thought. Graduation from high school means planning a celebration before sending off to *gulp* college. It might be a university or a community college or even a trade school, but with the thought of college comes the cost of said education.
It’s crazy to think about the future like that – their minds are going to change so much when it comes to what they want to be when they grow up. I remember being very adamant I would be a teacher when I was older… well, that did not happen! Honestly, I don’t think I have the patience for that so I have so much respect for our teachers and everything they do and deal with it! It’s fun to ask the kids though, because it definitely reflects their interests and what’s going on in their lives right now.
For example, Haley will flip-flop and say she wants to be a cheer coach or a teacher. But I’ve seen her thin patience (which could change as she matures, of course), but if I ask her right now she tells me she wants to work in a store (like a clothing store). Gavin used to tell me he wanted to be a police officer, but lately I’ve been hearing about how he wants to open his own sandwich place! Now, the oldest kid, who is now 16, he tells me he wants to be a chef. Kid, you better get in the kitchen and work on the basics first!
When looking at those aspirations, I can easily see some degrees they could go after that would benefit them! Business management, retail management (is that a thing?), nutrition, hospitality – there’s so many ideas! If we were to go ahead and start planning now and start to look at the cost of those specific areas and make savings goals.
Kids can have HUGE dreams, and there’s something in us as parents that makes us want to help them fulfill those dreams and be happy. It flips on like a lightswitch when they are born (I know it did for me, I would do anything for these kids), so if going to college is on their mind, then let’s make it happen!
As we look toward the end of the school year – and as we get ready to celebrate 529 Day on May 29! – I encourage you to look into Ohio’s 529 Plan for your child/ren. When it’s time to actually use the funds from the 529, you can use them ANYWHERE. You aren’t limited to just in-state, so if your child has their heart set on a college 800 miles away… the funds can be used there.
With the Cost of Waiting Tool from Ohio’s 529, you can play around with the numbers to see how much you can save with the timeline you have. Here’s a tip – start early. The earlier you start saving, it will be easier to reach your goals. Even if you can only save bit by bit, just start. There’s financial assistance out there such as grants and scholarships that will help offset some costs, but if you’re deadset on saving for college, then get started early and make consistent contributions! The money that goes into your 529 plan does not have to come just from parents, it can be gifted by grandparents, etc.! They can make contributions at any time for any reason (birthdays, graduation, milestones, etc.) and if your child gets a job and agrees to save towards school, you can add it to their 529!
It’s also worth noting the benefits of a 529 plan vs. opening a traditional savings account to save for college. Parents who put their money into a traditional savings account are leaving serious saving potential on the table. Consider this scenario: The average 2019 federal tax refund for Ohioans was $2,510. By adding $2,510 a year to an Ohio 529 account*, you could cover almost 38% of college cost a an Ohio public university, based on 18 years at 6% growth. Play around with Ohio 529’s College Savings Planner to see how much you should be saving based on your college savings goals, projected costs and how long you have to save.
*Assumes growth rate of 6% in the 529 plan and a bank savings interest rate of .09% as reported by the Federal Reserve Bank of St. Louis 1/2020. Also important to note that this is only a projection, and individual results could be lower or higher, much like mutual funds in a 401K plan.
Let your kids be dreamers while you research and save, it’s what we can do best to support them!