September is College Savings Month!
New School Year: Three New College Savings Habits
It's the start of a fresh, new school year. Parents, you're working hard to help your children develop good school habits. You want them to get enough sleep and exercise, finish their homework on time, and pack their school bags before going to bed. The new school year is also a great time for you to develop good habits of your own: college savings habits. Invest in your children's future by developing these three habits for saving for college.
1. Save a little today. It adds up to a lot tomorrow.
The sooner you start, the more time your money has to grow. If you save just $50 per month for 18 years, you'll have put aside more than $19,000 when your child starts college. And you can set up automatic deposits from your bank account, which will make the college savings habit very regular indeed.
- Learn why saving for college now is important.
- Understand the tax advantages of 529 savings plan. Your early-and-often contributions to a college savings account will gain you generous tax breaks including no federal tax on the earnings while the funds are in the account.
2. Match your investment strategy to your child's age.
With the DC College Savings Plan, you can choose an age-based portfolio that matches your child's age. As you child gets older, your college savings move automatically into the next appropriate age-based portfolio. In general, the portfolios become more conservative over time; a smaller portion of the portfolio is invested in stock funds as your child grows.
- Learn about the five age-based portfolios. Get more information about the portfolios' combination of growth-oriented stock funds and income-producing bond funds.
3. Use a College Savings Calculator to build your savings plan.
Take the guesswork out of college savings. With the DC College Savings Plan's free online College Savings Calculator, you plug in the numbers—your child's age, your expected monthly contributions, etc.—and the calculator prepares a customized report on:
- The total amount you will need to save for tuition and expenses
- Costs per child
- How your expenses will change by year
Good habits are easier to build if you get help. In this new school year, you'll help your children succeed in school, and the DC College Savings Plan will help you put aside money for your children's college education.
For more information on the DC College Savings Plan, please contact your financial advisor or call 800.987.4859 (800.368.2745 for non-District residents). An investor should consider the investment objectives, risks, charges, and expenses of an investment carefully before investing. The District of Columbia College Savings Trust Program Disclosure Booklet contains this and other information. Read it carefully before you invest or send money.
An investor should also consider, before investing, whether the investor's or designated beneficiary's home state offers any state tax or other benefits that are only available to residents of that state. An investment in another state's 529 college savings plan may not offer comparable benefits.
The Government of the District of Columbia does not guarantee investments in the program. Investment involves risk, including possible loss of principal.