Early in the new year is the perfect time to make saving for a loved one’s future a priority. And while resolutions are top of mind every January, studies show that 80 percent of folks tend to break their resolutions by mid-February.
If you’re determined to make 2023 the year you get your education savings in gear, there are a few steps you could take to make sure you’re on track to meet your goal.
Invest529 provides calculators and other tools to help families plan how much to save based on a child’s age, but experts say the key is to identify your goals, attempt to accomplish small steps to get there, and track your progress.
Families who have delayed saving typically put it off because they either don’t believe they have the money to start, or they can’t decide on the best way to save. These are understandable concerns. With Invest529, you can start saving with as little as $10 and choose how often and how much to save based on your budget. Identify a start date, whether that’s the beginning of the month or a particular pay period, and kick start that goal!
Discover "found" money.
Financial advisors consider “found” money in your financial plan a particularly helpful way to contribute to your 529 account. One example of this is using your tax refund. Consider transforming your tax refund this year into a contribution toward your Virginia529 account. Experts say an upfront lump sum contribution to a 529 plan savings account may benefit from potential market gains over the long-term.
Make it convenient. Make contributions automatic.
Reach your goals faster and put your savings on autopilot with recurring contributions from your checking or savings account. Automating your contributions can make the process of saving for future education costs easier. You can set up withdrawals from your paycheck, or simply link your bank account. Having a steady stream of automatic contributions, even of just $20 or $50, can be powerful.
Tell your child you have opened a 529 account for them. Research shows that students who know there is a college savings account for them are more engaged in their education. Also, consider telling your family and friends about the account and encouraging gift contributions. Virginia529’s gift center makes it easy for friends and family to contribute to the account for birthdays, holidays, or other special events.
Increase Contributions by 1%.
If you already have a 529 account, consider making an incremental increase in how much you’re contributing – whatever is feasible for your budget. If possible, increase the contribution rate 1% (or more) each year, or if you receive a pay raise (or new job).
Review and update account information.
In addition to the account owner, there are additional individuals who you can authorize to access your Virginia529 account, and also individuals who you can designate to manage your account(s) in the event that you are unable to manage it. Sign into your account and make sure the designated survivors and authorized individuals with access to your Virginia529 accounts are up-to-date.
Check in on your portfolio allocation.
To ensure your 529 account is working toward your savings goals, check your portfolio allocation annually. Knowing when you plan to tap into education savings and your personal risk tolerance should always guide your investment choices. This is one reason target enrollment portfolios are popular, because they help account owners manage their higher education investment by automatically becoming more capital preservation-oriented over time. This process occurs annually, with the most recent evolution effective as of January 1, 2023. And, if you’re thinking about changing portfolios, the Invest529 Portfolio Selection Assistant tool can help you make informed choices.