(Photo Credit: The Public Domain Digital Collection of the New York Public Library)
I call myself a professional aunt. As someone who loves the children that belong to other people, I’m more than ok with spoiling my nephew on any and all occasions. Gifts? Of course! Ice cream dates? Often! Things he needs? Whenever I can. With that, I own my nephew’s 529 account.
One of the best things I think I can do for my nephew is contribute regularly towards his education. Saving for his college education is not a priority for either of his parents and it hurts my heart because he is SO smart. He’s the little guy who gets jazzed about building robots and machines and I truly believe he’ll do something really cool once he grows up. I know all too well what happens when there’s no planning for funding a college education (I mean, look at my Debt Payoff page) and I want to avoid that for my nephew. I know how far my student loans have put me into the black hole of debt, but I think I can still alleviate that for my nephew on whatever educational path he chooses to take.
I know that my goals mostly focus on PAYING OFF debt, but saving for my nephew’s education has been a goal of mine for the past three years. By no means do I intend to pay for the entirety of his education, but I can help make a dent. Rather than give him a gift for each little holiday (Valentine’s Day, Easter, etc.), I opt to just move a little cash into the 529 account. His birthday is also super close to Christmas, so I don’t want to shower him with too much stuff either! Even though I have student loans, I know that making a few small contributions will continue to add up over time! Plus, it’s important to me to help out as I am able.
With help from his parents, I was able to obtain all of the necessary information to open the account. It seriously took all of five minutes!I’ve also made it possible so that his grandparents and great-grandparents can contribute to the account as well. Our state’s plan seems to fall in the middle of the spectrum when it comes to overall returns, but I’m not terribly worried about that. Here’s the basic plan of what I’ve done each year:
[Age] x [Months/year] = Amount added each year.
- Age 1: 1 x 12 = $12
- Age 2: 2 x 12 = $24
- Age 3: 3 x 12 = $36
- Age 4: 4 x 12 = $48
- Age 5: 5 x 12 = $60
- …and so on and so forth…
If I continue to do it this way, it’s not breaking my budget in any way as my income continues to grow each year. Most of the time, the monthly amount is hardly noticeable as it comes out of my account. I’m hoping that the account continues to get it’s approximate 3% return over the next several years. If it does, my nephew will have a little tiny nest egg of college money.
Don’t worry, I’m continuing to meet all of my debt payments AND save for retirement. I’m hoping my nephew continues to love his school and that he maintains his curiosity throughout his life. I’m glad that I can be a part of the little man’s educational path.
How do you save for college? Do you contribute to accounts for kids other than your own? Tell me your college savings and 529 tips & tricks!
7 thoughts on “In debt and owning a 529 plan”
You’re an awesome aunt! I’m sure he’ll appreciate all of that in a few years.
Aw, shucks! I sure hope he appreciates it at some point! 🙂
Professional aunts are the best, they’re how the world stays on its axis for parents!
I haven’t gotten the information we need to open these accounts for the horde of nieces and nephews but we are opening an account for our little one since we don’t have to pry information out of other adults for that account 😉
Which state’s 529 plan did you go with? I’ve been kicking around the plans and haven’t made a choice yet.
I use my own state’s plan. I thought more about shopping around, but I just went with the easiest option at the time. I definitely encourage looking for the state that has a plan that best meets your own needs! 🙂
Wow, I love that you’re putting money away for your nephew’s education. That is such a selfless thing to do and it will greatly benefit him. Your post has made me think about what I do for my own nephews… I buy them gifts that they really don’t need. Even though I can’t contribute much, surely the money I do spend on them would be better put away in a savings account. Just not sure my brother will understand if I do things differently!
Thanks! My sister is super glad I don’t contribute to his giant pile of toys most of the time! 😉