Matching Funds with your Children When Saving for College
Chances are that your child will hold several jobs throughout the course of adolescence. From paper routes, to summer jobs, baby sitting and even household chores that warrant an allowance. Each creates an opportunity to invest for college while teaching your child a valuable financial lesson.
Let’s assume your 8-year old child earns $50 a week from a paper route, part-time job, allowance or any combination of the three. If your child was willing to invest $25 a week in a 529 college savings account (and you were willing to match that investment), by 18-years old, the child could have accumulated nearly $30,500 for college.
This example assumes a 3 percent annual rate of return.
Allowing your children to be part of this process will teach them the value of investing at an early age while helping them save for college. On top of this, your earnings grow tax-free.
When the time comes to use the money for qualified higher education expenses, distributions are also income tax-free.*
A monthly investment program such as this can be arranged very easily through College Savings Bank. The bank offers direct deposit from your financial institution for as little as $100 a month or $50 a month deducted directly from your paycheck.