Simple tricks to increase 529 deposits
BY PETER DUNN
As a 529 college savings plan account holder, not only do you understand the value of an
education, but also the importance of pre-funding it. That’s exactly why you opened your 529
college savings plan account in the first place. But one of the hardest things to do is to find
more money within your income to increase your regular contributions. Unfortunately, if you
don’t find the money to increase your contributions regularly, your child could end up with a
tremendous amount of student loans. Here are some proven techniques to help you increase
your contributions on a regular basis:
1. From diapers and daycare to caps and gowns. Here’s what we know about raising
children: it costs lots of money. You may think this is why you can’t save for college effectively.
In fact, the opposite is true. You need to leverage the cost of raising a child to superfund your
college savings plan. From the moment you bring your child home for the first time, expenses
are created. But those expenses go away too. So when your child exits diapers, your cash-flow
begins to shift. If you’ve been paying for daycare prior to your child reaching school age, then
the money you’ve been paying toward daycare becomes available. Your ability to transition
these expenses into savings can make a huge difference years later.
2. Know your pay frequency. Depending on how often your employer pays you, there may be
additional savings opportunities two months out of the year. If you are on the 26-pay system,
receiving a paycheck every other week, then you will have two months in which you receive
three paychecks instead of two. If you receive a weekly paycheck, then there will be two months
out of the year in which you receive five paychecks instead of four. Since most people base their
monthly expenses on either receiving two paychecks or four, these extra checks can be used for
your financial priorities. There’s no better use than college savings.
3. Save your raise. If your pay rate changes on a regular basis, consider peeling a little bit of
your raise off and putting it toward college savings. It truly is the most painless way to increase
contributions to your 529 college savings plan.
4. Match up a struggle area with college funding. We all have at least one area of our life
in which overspending is an issue. Whether it’s too much dining out, too much shopping, or a
travel addiction, self-control is needed, yet hard to find. Have you tried matching up your need to
save for college against your problem areas? I have, and it works. There are two ways to continued on following page
accomplish this. You can either force it, or you can use the guilt method. Both methods work.
If you choose to force it, then simply make a contribution to your college savings plan at the
beginning of each month in the amount you’re trying to reduce your problem spending by.
Simply put, you’ll have less money to spend toward the things you’re struggling to put a cap on.
The guilt method is a bit more nuanced. As crazy as this may seem, it involves saying aloud “my
child will have student loans because I go to the mall too much.” Kind of brutal, right? It works.
You don’t want to miss the opportunity to fund your child’s education just because you have bad
spending habits. Turn up the heat on yourself.
5. When prices fall. Yes, sometimes consumer prices fall. Whether it’s the cost of fuel or even
seasonal utility bills, when prices fall, capitalize on the savings by funding your college savings
plan. If you don’t, you’ll end up absorbing the surplus and you’ll expand your lifestyle. Avoid
lifestyle creep by taking advantage of savings opportunities.
Consistently finding ways to increase your contributions to your 529 college savings plan will
significantly reduce the amount of student loans your child (or you) may have.
Peter Dunn a.k.a. Pete the Planner® is an award-winning comedian and an award-winning financial mind. He’s a
USA TODAY columnist and the author of ten books, six of which were featured in a nationwide launch at Barnes
& Nobles stores in January of 2015. He is the host of the popular radio show The Pete the Planner Show on 93
WIBC FM and is a columnist for the Indy Star. Pete has appeared regularly on CNN Headline News, Fox News,
Fox Business as well as numerous nationally syndicated radio programs. For more information visit petetheplanner.
com. Connect with Pete on Twitter, Facebook, and LinkedIn.
This is a paid testimonial. It may not be a representative of the experience of other customers and does not
guarantee future performance or success.
For more information about the CollegeChoice 529 Direct Savings Plan (“CollegeChoice 529”), call 1.866.485.9415 or
visit www.collegechoicedirect.com to obtain a Disclosure Statement, which includes investment objectives, risks, charges,
expenses, and other important information; read and consider it carefully before investing. Ascensus Broker Dealer
Services, Inc. (“ABD”) is Distributor of CollegeChoice 529.
If you are not an Indiana taxpayer, consider before investing whether your or the beneficiary’s home state offers any state
tax or other benefits that are only available for investments in such state’s qualified tuition program.
CollegeChoice 529 is administered by the Indiana Education Savings Authority (Authority). ABD , the Program Manager,
and its affiliates, have overall responsibility for the day-to-day operations, including investment advisory, recordkeeping
and administrative services, and marketing. CollegeChoice 529’s Portfolios invest in: (i) mutual funds; or (ii) an FDICinsured omnibus savings account held in trust by the Authority at Sallie Mae Bank. Except for the Savings Portfolio,
investments in CollegeChoice 529 are not insured by the FDIC. Units of the Portfolios are municipal securities and the
value of units will vary with market conditions.
Investment returns will vary depending upon the performance of the Portfolios you choose. Except to the extent of FDIC
insurance available for the Savings Portfolio, depending on market conditions, you could lose all or a portion of your
money by investing in CollegeChoice 529. Account Owners assume all investment risks as well as responsibility for any
federal and state tax consequences.
Not FDIC-Insured (except for the Savings Portfolio). No Bank, State or Federal Guarantee. May Lose Value.
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