Start Saving before the Birth of Your Child

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Back in the day, the purchase of a home was the largest expense parents faced. If you have one child, that may still be the case. More than one? Not so much.

Since it’s likely the expense of an undergraduate education will be the single greatest expense borne by parents, when should they begin to save?

For humor’s sake, we often say savings should begin at conception! In reality, we’re not far off.

Savings should begin before birth. Starting to save then allows time for savings to grow and earnings to compound.

So, where should a parent save?

The flavor of the day is the 529 Plan.

For specific family financial situations, it may be the correct choice, as funds can grow tax-free and, if used for qualified educational expenses, earnings typically are not taxed when used. However, a 529 Plan is not a savings vehicle. Rather, it is an investment vehicle.

Our rule of thumb – if money is subject to market fluctuation and can be lost, it’s not truly being saved. Even the materials provided by custodians about their 529 Plans discuss investment options.

If you’re interested in truly saving your money, having it earn compound interest, protecting it against loss, and being able to access it for educational expenses or any other expense you may have without penalty, we can help.

We are waiting to hear from you.

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