Starting School: The Smell of 529 Plans in the Air!

If you have kids, it’s better to start saving for college
sooner rather than later.

Schools seem to start earlier every year. I am of the mind that school shouldn't start until after Labor Day, but I lost that battle long ago! While starting school in August no longer has the scent of autumn in the air, it is a time to think about the future.

"It is never too early to start saving for college, and it can quickly become too late."
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It's Never Too Early to Start Thinking About College

School brings the thought of that ultimate education goal: college! How many times did your parents tell you, and do you tell your kids, "Get good grades so you can get in to college"? Yes, we turn into our parents in more ways than one!

First, set aside the arguments about:

• The high cost of college
• Whether or not attending college increases career earnings
• Whether private schools are worth it or not
• The likelihood of receiving scholarships
• The perils of excessive student loan debt

If college is an ultimate goal for your children or grandchildren, it is prudent to start saving today. Better to have started yesterday, but don't wait until tomorrow. Get it?

Ohio's College 529 Plan

College 529 plans [named after Internal Revenue Code section 529, similar to 401(k) plans, which got their numeric designation the same way] are an attractive tool for college savings.

Why? College 529 plans are sponsored by state governments, so I'll focus on Ohio's plan.

1. State income tax deduction for contributions, with a limitation
2. Tax-free growth and withdrawal of earnings for qualified expenses
3. Low-cost, diversified investment options (Vanguard)
4. Ability to change beneficiaries, which is very nice if you have multiple children or grandchildren

Start saving now, even with only small deposits. Time flies between kindergarten and college. Learn more about Ohio's plan at www.collegeadvantage.com. Contact us if you have questions or need advice. Your children and grandchildren will thank you someday!

Try a Financial Fire Drill: With Your Spouse ... and Your Parents!

Staging a financial fire drill will help you
be prepared for an emergency.

Here's a scary thought. Your spouse suddenly has a stroke or a serious traffic accident and is in a coma. Among a thousand other things to think about, he or she is the one who pays the bills. What do you do?

Pick up the checkbook and start writing checks? That's so old school!

"Stage a financial fire drill and let your spouse pay the bills for a month."
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Could You Manage the Family Finances on Your Own?

Chances are your bills are delivered electronically via email. Do you know your spouse's email password?

• Your spouse may use your bank website to pay bills. Do you know your bank account username, password and security question answers?
• Some bills may be paid automatically by bank draft or bank bill pay or credit card. Do you know which ones?
• It is no longer realistic to pick up the checkbook and simply start watching the mail.

Stage a financial fire drill and let your spouse pay the bills for a month. Or a week, if that is all you can handle. If nothing else, you should earn more appreciation for a time consuming, thankless job!

Use a Password Management Program

This is where password management programs that we have written about previously can be extraordinarily helpful. At the very least, you should have a list of bank accounts, credit cards, websites and access instructions and the right people should know where to find your list.

But don't stop there. What about your parents? For those of you who are designated as their power of attorney, this is even more important! The same process applies.

Don't wait to smell the smoke. Prepare yourself for an eye-opening experience!