Five Reasons Why It’s Never “Too Early” To Start Saving For College

//Five Reasons Why It’s Never “Too Early” To Start Saving For College

Whether it’s college coursework, paying bills, or setting doctor’s appointments, even the best of us procrastinate from time to time.

One thing you shouldn’t procrastinate on: Saving for college.

This is a common reason for putting off saving for your children’s college tuition. Many parents and grandparents believe they don’t have enough income to spare, so they put it off a few years or longer.

However, there are many benefits to starting early when it comes to your CollegeCounts 529 account—no matter how much you’re contributing, or how often.

Compound growth can help your account grow

If you’re able to start contributing right when your child or grandchild is born, simply put, you can potentially benefit from compound growth.

For example, with an assumed annual return at 5%, a 5-year contribution of just $50 a month after a $2,500 initial investment is projected to earn more than $3,600. But a 10-year span under those same parameters is projected to earn more than $5,900, and an 18-year span is projected to earn more than $12,870.

We’ve created a monthly contribution chart to help parents visualize how much their plans can potentially grow based on timeline and contribution amount.

In other words, if you start earlier, the more you can potentially earn!

Age-based investment options adjust as your child grows

Starting earlier doesn’t just allow for higher growth potential because of accrued interest—it allows account holders to consider being more aggressive in their investment strategies.

CollegeCounts 529 offers aggressive, moderate, and conservative age-based portfolio options that have more money invested in stock funds when a child is young. Stock funds have historically provided the potential for growth, but they are also more volatile. As the beneficiary grows older, the portfolio automatically reduces stock exposure by adding more conservative investments.

Not sure which age-based portfolio is the right fit for you? Review our age-based options to learn more about your account’s investment potential. We also offer an easy Risk Tolerance Questionnaire to help you determine which age-based option might be right for you.

There is no minimum or regular contribution required

The thought of setting aside a regular amount of income every month can be a daunting prospect for some families—and understandably so.

However, there is no minimum payment or regular payment required to open a CollegeCounts 529 account. Pay as much as you can as often as you can, without putting pressure on your monthly budget.

If you choose not to make regular contributions, though, we recommend looking into gift options for birthdays and holidays.

Automatic payments can ease the stress of contributing

Sometimes it’s enough trouble remembering to pay your bills every month. An extra thing to remember can feel like a bother.

However, if you’ve got a little income leftover to contribute monthly—no matter how big the contribution—setting up automatic payments can ease the stress of having to remember to contribute to your CollegeCounts 529 account.

Want to benefit even more without thinking about it? CollegeCounts offers the CollegeCounts 529 Rewards Visa® Card, which has a 1.529% reward on all everyday purchases, plus your rewards are automatically invested in CollegeCounts.

Open an account and start contributing today!

2017-11-06T13:50:43+00:00 October 23rd, 2017|