Happy 529 Day

There are enough self-appointed personal finance bloggers out there who write about what you should do nearly every day of the year although they do not really know you.

I don't know you either, but there are certain universal elements that I believe do apply to you, your family, your friends, your boss or your subordinates if you're the boss and myself, as well.

Those universal financial truths can typically fit on a note card, of which I gladly shared mine with you after reading about Harold Pollack's famous note card in his book, The Index Card: Why Personal Finance Doesn't Have to Be Complicated.

One of these truths is that it is helpful to save for your child's or children's college in a 529 account.  If you do not know what this number is to which I refer, there are literally millions of posts about them and their benefits.

After having started the more outdated UGMA accounts for my children because that is the type of savings account that existed prior to the 529's, I opened the right kind of account for my kids about ten years ago when our (now) college junior son was nine years old and our (now) high school sophomore daughter was only four.

Ours happen to be parked in the Illinois Bright Start program because we are unfortunate enough to be long-time residents of a politically corrupt, high crime and extremely high tax state named for the French spelling for the Illinois and Peoria Indian word "iliniwok," meaning men or warriors and perhaps referring to members of the Illinois tribe.

I automatically sent $500 to each of my children's accounts on the first of the month for many years after ramping up from $300 and then $400 for a while.  After getting each of them braces at the tune of $200 each for several years, I reduced the amount back to $400.  With our son midway through his undergraduate years, I have ceased contributing to his account about two years ago as we shifted from the savings mode to the spending mode for him.  I still automatically contribute $400 to our daughter's account on the first of every month.

As of today, I have attained my goal of having saved over a hundred grand for each of my kids for college.  Of course, the disclaimer is that a major dip in the overall market would diminish our daughter's accounts to under that amount.  I sincerely hope that does not happen, and not just for our daughter's sake, but for the entire country's sake.

So here we are on 5/29 or 529 day for the college savings industry.  I do not want to sound preachy but will urge you to open one of these accounts if you have a kid or kids and want to help him, her or them pay for college.

In a nutshell, any withdraws that you make from the account(s) after years of (hopefully) growth in the amounts will be tax-free so long as the funds are used for eligible educational expenses.

Could I think of things that I would like to do with two hundred grand?  You know it.  Not only could I pay off our house with that amount, but also fix things that need fixing and replace two of the last tube TVs in existence.

But as our neighbors purchase new vehicles, TVs, smart phones and travel on great vacations while not really saving much of anything for something far more important, their children's educations, I take some solace knowing that through thick and thin, I kept contributing to my kids' 529 accounts and still do with our daughter every single month.