Rochelle Allen, Program Coordinator, Empowering Financial Wellness Did you know that May 29th is National 529 Day? To celebrate, my529, Utah’s tax-advantaged college savings plan, is offering a fantastic limited-time deal: Open a new account between May 1st and May 31st, 2024, and receive up to $40 contributed to your account.
In a 2023 study on Trends in College Pricing and Student Aid by The College Board, findings revealed that recent high school graduates may encounter college debts as high as $37,000. Thus, the importance of saving for college has never been more pronounced. To better understand how a 529 account functions, let's explore it further and debunk some prevalent myths. Have you heard the myth that a 529 account can ONLY be used for college tuition? It's a common misconception, but it's false. Money in a 529 account can also cover qualified educational expenses such as room and board, books, computers, and internet. Plus, funds can be utilized tax-free for up to $10,000 for qualified K-12 expenses, registered apprenticeships, and technical colleges. And what if all the funds aren’t used for educational purposes? No problem! You have more options than ever. You can now roll money into a Roth IRA under certain circumstances. Younger sibling heading to college soon? Thinking about going back to school yourself? You can transfer funds to another eligible family member, including yourself! You can even maintain the account for future generations. These are the kind of leftovers you want! There are also fantastic tax advantages to a 529 plan. It may be eligible for state tax deductions, and earnings within the account grow tax-deferred. Withdrawals for qualified education expenses are tax-free at both federal and often state levels, boosting your savings. Additionally, there are advantages when it comes to the FAFSA. Funds held in a parent-owned 529 account are typically treated as parental assets on the FAFSA, reducing their impact on financial aid eligibility. If you think that 529 accounts aren’t flexible, think again. Choose from a range of investment options and use funds for qualified education expenses at any eligible institution nationwide. This flexibility empowers you to tailor your strategy and cover diverse educational needs. By starting early and making regular contributions, you can leverage the power of compounding to build a substantial fund for educational expenses. With no income limits or age restrictions, anyone can open and contribute to a 529 account on behalf of a beneficiary. 529 accounts offer a winning combination of tax advantages, flexibility, and control to help you achieve your education savings goals. Start saving with a 529 account today to secure your child's educational future and unlock a world of opportunities.
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By: Amanda Christensen, Utah State University Extension professor, Accredited Financial Counselor, Utah Money Moms editor April is National Financial Literacy Month, established in 2003 to teach Americans the importance of creating and maintaining healthy financial habits. During this month, individuals are encouraged to explore topics such as budgeting, saving, investing, and debt management.
The Consumer Financial Protection Bureau, combined with a review of research and consultation with leading experts, found that financial well-being includes the following four elements: Did you know that a spouse can qualify for Social Security benefits even if they never worked? Just because you’re not earning a traditional ‘paycheck' doesn't mean you can’t collect Social Security benefits.
Here are some important factors to know:
Kelan Combe, Program Coordinator USU Extension Empowering Financial Wellness Program Tax season is coming to a close on April 15th! While no one likes filling out all the boring forms to file your taxes, I know we all love it when we get a tax refund. The tendency of most people is to immediately go out and spend their tax return, but let us offer you some more productive ways to use your refund to improve your financial future.
1. Pay down debt. If you are working to pay off debt, the best thing you can do is make extra payments whenever possible. Let me share a real-world example:
2. Start, or add to an emergency savings account. Having an emergency savings account is one of the most popular recommended strategies for financial wellness, and for good reason. According to Bankrate’s Annual Emergency Savings Report, more than half of all Americans say they couldn't pay for a $1,000 emergency expense from a savings account. 1 out of 5 people say they would use a credit card and pay it off over time, but what would it look like to use a credit card instead of savings? Well, using the same averages as our previous example, it would take 4.5 years to pay off, and you would end up paying almost $600 more just in interest. This turns a one-day emergency into a 4.5 year emergency! That is why most financial professionals consider it necessary to have emergency savings. 3. Invest in your future. We’ve already seen a few examples of how interest rates can work against you, but why not use your tax refund to make them work for you? By investing your refund in a retirement account like an IRA, your $1,000 today could be worth over 10 times that by the time you reach retirement age. You might also consider investing in your kid’s education using a 529 plan. Even a little bit invested right now could mean massive savings in the future. 4. Save for a fun goal. Maybe there is a vacation you have always wanted to take, or a car or other large purchase you have always wanted. Instead of using your whole tax refund now, consider saving some for a future goal. Using an online savings account could be a great way to boost that savings even further! NerdWallet is a great resource to compare online savings options. Remember that you are in control of your financial future. So when something big like a tax return comes your way, make sure your money is working for you and not the other way around. Rochelle Allen, Program Coordinator USU Extension Empowering Financial Wellness Program Have you ever wondered about the incredible impact that FINANCIAL acts of kindness can have on your family? Can you really improve your family by giving to others? Can you improve the world? Think about the last time someone's financial generosity made a real difference for you. What did they give? How did it make you feel?
Financial kindness isn't just about transactions; it's about making investments in well-being. Research shows that engaging in financial acts of kindness not only benefits the recipient but also gives a positive boost to your financial well-being. It's like a double dose of satisfaction, ramping up your feelings of financial happiness. Imagine the sense of accomplishment and purpose knowing you can make a financial difference. It goes beyond handling momentary financial stress – it allows you to focus on the positive impact you can have on someone else's financial journey. Studies consistently reveal a connection between financial acts of kindness and an overall increase in financial well-being. Here's the exciting part: financial kindness has this incredible power to set off a ripple effect. As you experience financial generosity, you're more likely to pay it forward, creating a continuous flow of positive financial energy. It fosters a supportive financial environment where opportunities and success can multiply. Think beyond personal finance – acts of financial kindness also play a crucial role in mental health. In a world filled with financial challenges and stressors, these acts become beacons of hope. They remind us that, even in the face of financial uncertainties, there's still goodness and the potential for positive financial change. Paying it forward in the realm of finances is like sprinkling drops of positivity on your daily monetary interactions, erasing some of the negativity encountered through various financial channels. It's a collective effort, highlighting the good in financial transactions and creating a sense of financial community. In summary, paying it forward in the financial realm goes beyond a mere transaction – it contributes to a financially happier world, one interactive and generous act at a time. By embracing this financial kindness and fostering a supportive environment, we can create a ripple effect that spreads positivity and opportunity. |
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