It seems like every day, week, or month is “National Something Day,” doesn’t it? Whether it’s eating a cheeseburger or hugging a stranger, there’s a celebration for everything.
But sometimes those occasions can be helpful reminders. And these next couple months are exactly that when it comes to saving for college.
September is College Savings Month, which is a big one for us! Now that school’s back in session for youngsters and college students alike, it’s a great time to think ahead to your child’s first semester on the campus of their future alma mater.
Likewise, October is Financial Planning Month, another useful note on the calendar. We know that your CollegeCounts contributions don’t just appear out of thin air—it’s important to keep a balanced budget for your family so that you’re saving as much as you can without ignoring your other monetary responsibilities.
So, how does one celebrate College Savings Month and Financial Planning Month? We’ve got a few suggestions for both existing and new CollegeCounts account owners.
New to CollegeCounts?
If you’re considering starting your college savings journey, now is the perfect time. Here are three steps you can take this fall:
1. Start planning ahead. It’s best to start early when you’re saving for college, and that means looking forward. Take a glance at our College Savings Planner to determine what future college costs may be and then set your goals and budget for contributions.
2. Know your benefits. If you think your children are too young to have a college savings plan, think again. There are lots of advantages to starting early, including tax-deferred growth, tax-free withdrawals for qualified higher education expenses, and an Alabama state income tax deduction for contributions.1 When your children get to college, they can use their funds on more than just tuition2.
3. Open an account. Like most things worth doing, the hardest part is the first step. CollegeCounts makes that first step easy with a straightforward online enrollment option that takes just 10 minutes to complete. Open an account and start saving today, even if you’re only saving as little as $25 per paycheck. Your children will thank you!
Already saving with CollegeCounts?
We’re excited to know that you’ve been saving with CollegeCounts! Here are a few ideas to continue your efforts:
1. Establish or increase automatic contributions. Contributions via an automatic investment plan are a great way to ensure you’re making regular contributions to your account. If you are already contributing via AIP, consider increasing your contributions by $10, $25, $50, or more.
2. Encourage holiday gifting. Once October is over, it’s officially the holiday season, right? If your children have enough toys already, encourage your family and friends to make a gift contribution to your child’s CollegeCounts account instead. Contributors who are Alabama taxpayers may also be able to take advantage of the state income tax deduction for their contributions1—a win-win!
3. Earn extra rewards. Want to chip in some extra cash without having to increase your regular contributions? The CollegeCounts 529 Rewards Visa® Card3 offers cardholders a 1.529% reward on everyday purchases.
We hope you’ll think of us during College Savings Month and Financial Planning Month!
1Individuals who file an Alabama state income tax return are eligible to deduct for Alabama state income tax purposes up to $5,000 per tax year ($10,000 for married taxpayers filing jointly if both actually contribute) for total combined contributions to the Plan and other State of Alabama 529 programs. The contributions made to such qualifying plans are deductible on the tax return of the contributing taxpayer for the tax year in which the contributions are made. In the event of a Nonqualified Withdrawal from the Plan, for Alabama state income tax purposes, an amount must be added back to the income of the contributing taxpayer in an amount of the Nonqualified Withdrawal plus ten (10%) percent of such amount withdrawn. Such amount will be added back to the income of the contributing taxpayer in the tax year that the Nonqualified Withdrawal was distributed. Please consult with your tax professional.
2Withdrawals used to pay for qualified higher education expenses are free from federal and Alabama state income tax. Qualified higher education expenses include tuition, fees, books, supplies, and equipment required for enrollment or attendance; certain room and board expenses incurred by students who are enrolled at least half-time; the purchase of computer or peripheral equipment, computer software, or Internet access and related services if used primarily by the beneficiary during any of the years the beneficiary is enrolled at an eligible educational institution; and certain expenses for special needs services needed by a special needs beneficiary. The earnings portion of a non-qualified withdrawal is subject to federal income tax and 10% federal penalty tax. In addition, Alabama provides in the event of a non-qualified withdrawal an amount that must be added back to the income of the contributing taxpayer. The amount to be added back will be the amount of the non-qualified withdrawal plus 10% of the amount withdrawn.
3Subject to credit approval. Full details appear in the CollegeCounts 529 College Savings Visa® Card Brochure, Application, Credit Disclosures, Agreement, and Rewards Program Terms and Conditions. The card is administered and issued by Union Bank & Trust Company pursuant to a license from Visa® U.S.A. All terms, including reward points, fees, and APRs for transactions, may be subject to change. Net purchases are defined as the dollar value of goods and services purchased with a card beginning with the first day of the billing cycle that includes the cardholder’s enrollment date minus any credits, returns, or other adjustments as reflected on the monthly billing statement. Rewards of at least $50 must accumulate for an automatic transfer to the designated CollegeCounts 529 account(s) each quarter.