EARLY YEARS: May 29 is National 529 College Savings Plan Day
This Friday, May 29, is National 529 College Savings Plan Day. But thanks to the COVID-19 pandemic, some families' finances are being stretched to the limit, and they may not be contributing as much to college savings accounts.
"We've seen almost half of the respondents in a survey we just conducted, of over 1,200 Americans have decided unfortunately to pull back on their college savings."
Jordan Lee is the CEO of CollegeBacker, an online 529 platform. With so many people out of work because of the pandemic, Lee says saving for college has been put on the back burner. But it doesn't have to stay there for long.
"The good news is if you do have a 529 plan, you're three times more likely to keep contributing," says Lee.
Even if you start a college savings account late, Lee says tax-free money adds up quickly. The earlier you start, though, the better.
"That extra year, you start one year earlier you're going to have the benefit of compounding growth for one extra year. Even if it's a small contribution that you're making each month, it really does add up, because of how the investment returns can compound," he says.
If your family has experienced a job loss or furlough, Lee says to address your family's immediate needs first. But there are other ways to keep that college fund growing during these tough times, including asking others to donate to it.
"We've seen our families save for an average of 40 percent more, because of the gifts from friends and relatives," says Lee.
Making it a gift that keeps on giving. You'll find links to information about Virginia's 529 plan, as well as CollegeBacker, here: