I read a little story in today's Washington Post that got me thinking about future Christmas and birthday gifts for our children.
It was about a new online program that allows family and friends to take money they would give for gifts and put it in a 529 plan that would save money for college. Although it's only available in a few states right now, they hope to have it available for everyone in the near future.
Parents can set up a fund and invite people to invest in her future instead of buying her a toy and can donate as little as $15 to the fund.
According to the Post, the "state-sponsored 529 plans are the best way to save for college. Not only does your money grow tax-deferred, but distributions escape taxes altogether if they're used for qualified educational expenses."
Pat and I were both the first people in our immediate families to get college degrees (although we chose the lowly-paying profession of journalism - but that is another story!).
We're hoping our children will make their way to college down the road and what better way to help pay for this than saving a little here and there.
Savannah has lots of toys and I'm sure she'll get plenty more... but we're planning on starting a 529 plan (and also one for little J.P. when he arrives) that will give people another gift option.
4 comments:
That's a pretty cool idea.
That's a pretty cool idea.
That is a great Idea, James and I have also talked about buying saving bonds for our kids and neices and nephews instead of birthday and christmas presents since it seems all of them have more toys then they will ever need! LOL
Awesome idea!
Suze and I have talked about financial literacy as an important thing for Isabella.
One of the things I'll be looking at doing with her, when she's a bit older, is "investing" through Kiva.org. It's a charity that lets you make "microloans" to, say, a store owner in Bolivia, or a sheep herder in Kazakhstan. You research the businesses, see if it's something you want to invest in, figure out if the timeline to return the money is responsible, see if it sounds financially responsible (no, the sheep herder should not be asking for a loan to buy a Ferrari), ... and then make loans of as little as $25.
In terms of actual investment, it's awful -- no-interest loans combined with an organization that requests a 10-percent donation to cover overhead. So each loan, in effect, loses 10 percent, instead of turning a profit like a good investment should.
But you're teaching some business basics about research, evaluating people and business plans, and that companies are comprised of people. And you get to help people around the world.
I put some money in as a Christmas present to Suze a couple years ago. The same money's been through the hands of several people now. I think that's a good kinda lesson to teach to my girl.
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