The Best Ways to Save for Your Baby’s Future

It'll be a while before your baby heads off to college, but that doesn't mean it's too early to start saving for their education. What are the different types of education savings plans? How much should you save each month? And what are the benefits to starting early?

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Episode Transcript

Natalie Gross 0:03
Your baby is, well, a baby. He's got a long time before he goes off to college, but that doesn't mean you can't start planning for it. Today I'm talking with an education savings expert and a couple of parents to give you some tips for planning financially for your baby's future. This is Newbies.

Natalie Gross 0:28
Welcome to Newbies, listeners .Newbies is your online on the go support group guiding new moms and dads and through their baby's first year. I'm Natalie Gross, mom to a four year old boy and a baby girl. And we've got a great show today talking about financial planning for your baby's future. Before we start our discussion, I wanted to let you know about our membership club called Mighty Moms. And that's where we chat more about the topics that we discuss here on the show. And it's an easy way to learn about our recordings in advance. Maybe you want to join us live to share your own experiences. The best part is it is totally free to join and you can find out more information on our website new mommy While you're there, you can also subscribe to our weekly newsletter that will keep you updated on all of the podcast episodes we release each week across all of our parenting shows. And of course, to get notified whenever we drop a new episode of newbies Be sure to subscribe on our favorite podcast app. Our featured guests for today's episode is Patricia Roberts, Chief Operating Officer at Gift of College Inc. We'll be meeting her in a few minutes. But first I want to introduce you to our panel of parents who will be joining us for today's conversation. And I said moms and dads earlier because we've got on a debt today, Fabian Ramirez and we also have on mom Victoria Wasson. So parents Welcome to the show. I would love it. If we can start with some introductions. Tell us a little bit about you and your families. In your experience with today's topic. Victoria, do you want to kick us off?

Victoria Wasson 2:18
Sure. My name is Victoria, I do have two children. I have a five year old girl and a two year old boy. I've been in the world of banking and finance for more than 10 years now. I have my degree in accounting management, but ended up going into retail banking after I graduated. And now I've moved into the finance world. So I love the topic of personal finance, love the fact that I can be able to jumpstart my kids career if they want to go to college, don't think they have to if they don't necessarily want to, but I want to have that plan in place. So I am very passionate about having any type of savings, whether it be just a regular savings account or 529 plans that we do have for our children as well. But it is my personal passion and love that I'm here.

Natalie Gross 3:06
Awesome. Thanks so much for being here.

Fabian Ramirez 3:09
All right, now I go next. So my name is Fabian Ramirez, my wife and I just love education. My wife Andrea has a PhD. I have a master's degree. So naturally, when we had our first child, Eden, who was now 12 years old, we wanted to go ahead and start her college fund. What we found is, you know, the higher you go in education, whether it's your masters, or if you pursue your PhD, there are less and less scholarships available for those students. So that's one of the reasons why we wanted to start early, because we know we're going to kind of not push her but at least allow her to say, Hey, if you want to continue on and go to grad school, we're going to make sure we have some finances available for you. So we started her 529 and also a Roth IRA for her in order to have those funds available.

Natalie Gross 3:57
Awesome. And you have two daughters do you have Yes.

Fabian Ramirez 4:01
I also have Eva, Eva Kate, and she is eight years old and she also has a 529 as well.

Natalie Gross 4:08
Okay awesome. Well, we are about to learn all about what those 529s are after a quick break. So stay tuned.

Natalie Gross 4:21
Today on Newbies, we're talking about financial planning for your baby's future with education savings expert Patricia Roberts. She's the author of Route 529, a parent's guide to saving for college and career training with 529 plans. And she's been featured on Good Morning America, CNBC, and in Forbes, money, US News and World Report and lots of other networks and publications. Patricia, it's an honor to have you welcome to newbies,

Patricia Roberts 4:43
Thank you for having me here today. I'm very glad to join you and your audience.

Natalie Gross 4:48
Yeah, well we've already started talking about 529. So give us kind of a basic explanation of what that is.

Patricia Roberts 4:55
Certainly, I'm very impressed that your two guests are familiar with 529 plans because I'll tell you two thirds of Americans are not. So I'm happy to be sharing some information with you to educate others and inspire I hope. So first of all 529 plans are named after section 529 of the Internal Revenue Code you may be familiar with. There's sections of the code like 401, k 403. B, those are retirement provisions. But this is a special section of the Internal Revenue Code, which allows special accounts to be established for a particular purpose. And that particular purpose is education. When 529 plans first came into being nearly 30 years ago, there were originally for post secondary education only. But in more recent years, and I hope we'll talk about this a bit during the course of this conversation, they've been expanded for use for K to 12 tuition only. But the theme is generally these are accounts for which you earmark money for education. What's great about 529 accounts is that when after tax dollars are contributed, when they grow in value within the 529 account, the earnings are not taxed. You may recall if you have a bank savings account, or mutual fund account or other forms of savings and investing each year, just prior to tax time, you get a statement in the mail that shows how much you have earned on those accounts and taxes owed. But that is not the case with 529. These accounts are growing tax deferred. And when the funds are withdrawn to pay for a wide range of educational expenses, these are not just for college, those earnings are never taxed. So that's what makes these accounts special. And it gets even better 3637 states and the District of Columbia incent their residents to save and 529 accounts or invest in 529 accounts more accurately by offering an annual state tax deduction or credit for those contributions. So that's an added incentive. What else is important to know about 529 accounts which make them different than other forms of saving and investing is that you, the account owner, whoever you may be, you could be the child's parent, you might be a grandparent, you might be a friend or relative. You don't have to be the parent. But whoever you are, whoever owns that account is in control of it at all times. That is very different than custodial accounts that parents often set up for their children say at a bank you set up an UGMA uniform gift to Minors Act account or UTMA account uniform trust to Minors Act account, those accounts become the child's Upon reaching the age of adulthood either 18 or 21. Those accounts belong to the child and the child can do whatever they want with those funds when the time comes. That is not the case with 529. The account owner is always always in control of the account. So they will decide whether and when to disperse the funds. So if your child's going in a direction that you're not necessarily comfortable with, they look like they're going to buy a Harley instead of going to Harvard, you are not in a position of releasing those funds. They are yours to control. So that was a really the highlights of 529. And I hope we'll talk even more about them during the course of the discussion today.

Natalie Gross 9:05
Yeah, thanks so much. That was a really great breakdown. So you know, most of our listeners are new moms, new parents. So in your opinion, when should parents start one? Is there a thing is too early?

Patricia Roberts 9:18
I don't think there is and by the way, I was once a new mom myself. So I applaud all of you new moms and new dads. I know you've got a lot on your plate and a lot on your mind. And this is probably just one more thing. But I hope your minds will be at ease after we talked today. So no, no, never too early to begin. Why is that the case? You've got the power of compounding, right and the earnings on these accounts and the great tax benefits. Why not start early? Many parents don't know it sounds like your parents have already had a child but perhaps they'll have additional child children in the future. Let me let you know that you can even set up a 529 account before the child arrives. Most people don't know Know that certainly you don't yet have the name of the beneficiary, you don't have a social security number or a date of birth when you're setting it up. But you can set the account up with yourself as the beneficiary initially, because 529 accounts can be used for account owners own education set yourself up as both the account owner and the beneficiary. When that child arrives, and you've got the information, you need their name, date of birth, social security number, you can change the beneficiary to them. Why is that helpful? Certainly, it gives you a little extra time. I love the idea of 520 nines being set up before the child arrives, because you get very busy when that child arrives. So it's helpful. And it can even be something you share with guests for a baby shower, for instance, or when people are wanting to celebrate the arrival of the child or a christening or breast some religious celebration around the child's birth, you already have an account setup to which those individuals can contribute. So I say starting early is a great thing. But I also want to say for parents who've got older children never too late to begin as well. What after you can save is that much less that your child will need to borrow and repay with interest. So don't be hard on yourself. If you didn't start early, start early if you can, but where ever you are in your journey, just get started now, because it's going to make a difference in the long run. The other benefit to starting early is the peace of mind, it provides, I set up my account, I think as soon as I came back from maternity leave, I set up my in such a way that the money was taken directly out of my paycheck, I had no idea how I was going to afford to save for this child, we were living in a small one bedroom apartment, we were paying off over $100,000 in our own student loan expenses and desperately wanted better for this child that we had had. But I started taking I think it was $25 a paycheck out of my from directly from my paycheck into a 529 account. And then I increase that over time when we were in a better financial situation. But getting started early, setting it up in some sort of automatic way really can make a huge difference. I do want to mention that friends and family can contribute the 520 nines make it very easy. So between birth and some form of higher education, there's at least 18 Birthdays, at least 18 holidays of every family celebrates at least one holiday a year, throw in some other milestones and celebrations, you've got about 40 events for which loved ones can contribute to the account. And I strongly suggest telling them to hold off on those stuffed animals hold off on those expensive outfits that are quickly outgrown, and instead maybe give a more modest gift and a contribution to the savings account. That can make a huge difference.

Natalie Gross 13:04
That is really such a great idea. I love that. So I was gonna ask you, you know, you mentioned you put in $25. At first, would you recommend putting like a percentage of your income? Or what are some yearly or monthly goals that families can kind of look at?

Patricia Roberts 13:20
Well, this really depends largely on what the family's objectives are, what resources they have on hand. There are calculators online, there's a website called Saving for, for instance, and most of the 529 plans have the same sort of calculators where you can put in what your time horizon is, what's the age of the child, what your objective is, are you looking to save 100% of the cost? Most people can't and don't do that some prefer to put in a target of 50% or a third of it. You need to really think about that. And you need to think about I know it's very early in your child's life to know this but you need to think about what type of institution would you be saving for because it will be quite different cost at a particular point in time in the future. So is it a four year in state public school? Or might you be thinking of an out of state private school for instance. So you need to factor in your time horizon, what you're saving for what percentage of it you want to attempt to accumulate? And then you want to think about what's your risk tolerance, right? How comfortable are you in the financial markets, because there are ways to save that have less risk they also have generally less reward to them. So you want to think about you know what type of investment vehicle you want to be in within the 529 plans. There are many styles of investing that are offered. And that's gonna really impact what your potential growth on the account could be. And I say potential because we know markets can go up and down. And then the other factor and think of it I'm sorry, this isn't a straightforward answer that it's $50 a paycheck. The other factor you want to think about is who else in your life may be saving, that may or may not be a comfortable conversation to have, but you may have the child's other parent with whom you don't live, also saving something you may have grandparents saving, there may be somebody coming in from another source, you might want to have that in mind. But I say, think about you know, what your plan would be what you'd like to cover and go to some of those calculators and just get a sense of it, and then trying to back into what you would need to contribute. I also want to mention that you will have found money along the way in your parenting journey. I know it doesn't feel like that you look like you're always spending money. But when your child is potty trained, that's an incredible milestone, so many reasons to celebrate it. But hey, if you were spending $60 a month on diapers and diapering supplies, you now have that money freed up, right, you're a little potty champion has freed up some money for you that $60 A month can now go into a 529 account. And in my book, route 529, I talked about these different ways where you can find money along the way and put it in. And in fact, if you take that $60 a month, over 15 years, even if your child wasn't potty trained until 315 years of $60, that comes to like, I think over 15 or $16,000 in savings. So please know that whatever amount you decide to maybe take out of your paycheck or contribute regularly, you will have opportunities, I believe you will earn more in time, you will have these gifting opportunities, you'll have these milestones, your child will get out of daycare and eventually go to maybe a public school where you're not paying anything, you'll have that daycare money, you'll have opportunities to find money along the way. So don't be discouraged. Just start saving. Hmm,

Natalie Gross 17:12
That's a great perspective. You kind of started talking about this a little bit, but can you kind of expound on the risks of saving money this way?

Patricia Roberts 17:20
Sure, sure. So what's important to know about 529 plans, they are called 529, college savings plans. And that name confuses people, they think they're just for college. And indeed, that can be used for trade and technical school registered apprenticeships, many forms of education well beyond college, but the word savings also confuses people. And while every state except for Wyoming, by the way, has a 529 plan in some states have multiple plans. Most plans or many plans do not have fully insured investment options within them. So they don't have some do but many don't have FDIC insured options within the plan from which you can choose. So I would say one of the risks and investing in any way, not just in 529 plans is market risk market volatility, how comfortable? Are you riding the wave of ups and downs in the market? How comfortable? Are you from a financial perspective? Can you really tolerate such a risk? And can you emotionally tolerate such a risk? Some people can't. So I'd say there's a risk in the potential loss of money. But that risk goes with really every form of investment. But if you can find a 529 plan that has a nearly risk free or an FDIC insured option in it, and maybe invest in that, but keep in mind, you're not likely going to be keeping up with the rate of inflation of higher education, but less risk, less reward. Often, you can also mix and match your investment options. I know that I put my son in an age based option, which was more aggressive when he was young became more conservative as he neared college. But even at that when he got to a 10th grade, I was like I gotta get some of this money out of that option. And into something that's very, very secure within the 529 program that I was in. It wasn't FDIC insured, but it had very little risk. So I took like 25% of his money and put it in something secure, because I thought, Oh, just as he's reaching college, I don't want the market value to go down even though it's generally been going up through the years. So you really need to know yourself. So I keep market risk in mind, again, not unique to 529 plans. And I guess the other risk is, you know, I guess there's an unlikely risk that your child's not going to want to pursue any form of post secondary education. I think that's unlikely given the broad use of these plans, but if you really think there's a chance that they're not going to you might not want to be investing in account that's really designed for that purpose. Although you can, as the account owner change the beneficiary at any time, with no tax consequences, as long as the beneficiary is a member of the family of that original child, for whom you set up the accounts, you could switch it to a sibling of your child, you could switch it to a cousin of your child, a step sibling, you could change it to yourself, if you're the parent and you've set up the account, you can use the funds, you can save the funds for your child's children if your child doesn't want to go to college. But if you think you're not going to have any use for education with this account, then I would, you know, really consider investing or saving in another way.

Natalie Gross 20:43
Thank you so much, Patricia. I know I'm learning a lot. So I can't wait to continue the conversation. But we're going to take another quick break, and then bring back on Victoria and Fabian into the conversation. So stay tuned.

Natalie Gross 20:59
Welcome back, Victoria, and Fabian, any thoughts on what we've just heard from Patricia,

Victoria Wasson 21:03
I personally love everything about the 529. Both my husband and I graduated with school loans when we were paying them off even after we had my daughter five years ago. So it was one of those life lessons learned. We want to set something up for our kids college expenses, right now with the amount that we're putting away, they may not be able to graduate completely debt free, but at least we're giving them that start that we can hopefully go towards it. And maybe they'll get scholarships, or West Virginia has a program that they can get a scholarship to get a full ride to the West Virginia universities, just depending on where they want to go. But the 520 nines were something that we talked with a financial advisor about and he just recommended we set them up. And it really has grown over law, my daughter's for four years now, my son two years, which we all know how the market has not been good last year, but at least it's still in the positive, which their savings accounts at the bank would have grown grown by point zero 1% interest, so absolutely nothing. But now they're actually having an opportunity to grow the money that we put into it.

Fabian Ramirez 22:11
Yeah, I would say I really enjoyed hearing her talk about finding the money, there's always so places in our lives where we can see it. And she mentioned diapers, you know, once the kids are out of diapers, that's the way I actually do a lot of our finances, I look for this for that method, right? We used to pay for this. And now we can pay for that. And so something as simple as $25, which I think is all you need to even start a 529. For example, two years ago, we moved to the state of Maryland. And that's all you needed to just start 120 $5. Not only that, but Marilyn actually has a state contribution, which basically means that if you put in at least $250. And if you qualify, there are some requirements with income and whether you file jointly or not, but the state of Maryland will actually match it or contribute $250. And then I think the maximum was like $500. So for example, I went ahead and applied and I actually received the $500 contribution for Eva, who's eight, and then for Eden as well, who's 12. And now that's $1,000 that are received just this one year, if I do that for the next 10 years, you know, that's 10,000 total, that I would receive, you know, 5000 per child for education expenses in the future. I mean, that's just what was contributed by the state of Maryland. And so there's definitely a lot of pluses when it comes to 520 nines. You might want to look into exactly what your state wherever you live, if they have a contribution, be able to take advantage of those.

Natalie Gross 23:48
That actually leads into a really great question, Patricia. How does this differ state by state? And where can parents kind of get started to find out more information about that?

Patricia Roberts 23:58
Yes, so the 529 plans do vary by state and every state except for Wyoming has at least one plan, as does the District of Columbia. What varies by state is whether they offer as an incentive a state tax deduction or credit to incent the residents to participate. Whether they offer additional benefits like matching grants, or other forms of assistance to help families the investment options will vary by state, each state some states do the investing themselves. Many states engage in investment management firm, like a Vanguard, for instance, or Fidelity Investments on Merrill Lynch someone to handle the investments, the Hartford, I think in the case of West Virginia to handle the investments for them. So the investment design will be slightly different and the investment options will be different, as well the fees and expense is associated with those plans. But you can go directly to your state's 529 plan. While you do not have to invest in your state's 529 plans, I think you've just heard a few reasons why you might want to consider it right, you might want to start, you should start by looking at your state's plan to see what is it you'd be missing by picking another state's plan.

Natalie Gross 25:26
So you can pick one in a state you don't live in?

Patricia Roberts 25:28
That's absolutely right. And you can have more than one 529 plan. I've worked with 529 plans for years. So for the experience, I have invested in a few different ones, ones that I've worked on as a professional and have been involved with, I've always wanted to see what the experience is if I'm working on a plan. So you can have multiple plans and multiple states. And maybe you do want that plan in that state that has the FDIC insurance option just for a little bit of your money. And then you want the bulk of it in your home state because you're in Maryland, and you're getting some kind of matching contribution or annual tax deduction, but you can have multiple five to nine plans. And as I said before, you don't need to be the parent of that future student to set it up so others in your life and I can't stress this enough can both contribute to a 529 plan account that you've established, you'll then control that money and what happens with it, or they can set up one themselves for your child. So perhaps they're in a state where they get a tax deduction if they were the account owner. So maybe they want to set up a 529 for your child. Listen, college is expensive. So the more people who get involved in saving the better for your child, but better the outcome will be. What I wanted to mention is that a growing number of employers are beginning to offer 529 As a financial wellness benefit, and how are they doing it at a really low lift. They're bringing in experts like me to educate their employees about the existence and usefulness of 529 plans. Maybe it's in a town hall meeting, maybe it's for an employee resource group, that's parenting focused, and they're having me introduce some education, that's a benefit since two thirds of people don't know about these. But what some employers are doing beyond that is they're offering payroll deduction to 529 plans. They're using platforms like the one my company offers gift of college. And they're allowing their employees to contribute to any five to nine plan because some employers have employees in multiple states, and then they are matching contributions to those plants. So that's pretty exciting. I would suggest for your listeners, to at minimum, ask your HR department and your benefits team, your manager, would it be possible to bring some 529 education in? Would your employer be willing to offer payroll deduction to these plans? And could they potentially match contributions to them? I think it's a great thing to do. It benefits everyone. Because when employees are less stressed when employees know that their employer is focusing on something important to them, they tend to be more engaged and turnover is less. So I can't stress enough the value of at least asking your employer if they get engaged with five to nine plans. Employees, there's been research that shows employees save 75% more in their 529 accounts. When the money comes directly from their paycheck. Why is that because the money doesn't first pass their hands. And that can be an incredible benefit for employees. And then my favorite thing that employers are doing these days, is instead of giving the silver spoon, the $125 floral arrangement, baby br and with the company logo on it, they're giving a contribution to a 529 plan as a welcome to the world gift for their employees who are going out on paternity or maternity leave. I think that's incredibly valuable. And it sets the employee up on a good financial track for the future and for that child.

Natalie Gross 29:21
Victoria, I'm curious, do you work in the finance world? Is this something you've heard of?

Victoria Wasson 29:25
No, but I am very interested in it and you better believe I will be contacting HR to see what we do about adding that because that's amazing. I mean, not even just the match. I mean, mine personally comes out of my paycheck gets transferred into my kids savings account and then the automatic deduction just happens from there. But I still have like a little loop going but at the same time like if employers are willing to match these dots amazing.

Patricia Roberts 29:52
Please let me know if I can help you. I'm I'd be glad to I speak to employers of all sizes all all the time, and I'm telling you, when they start offering benefits like this, it really makes a difference in terms of recruitment, retaining employees, it just makes everybody feel good about something that's quite important to them. And trust me, during this pandemic, employers have gotten a good look into your lives, right via zoom, they know what's important to you, they know the stress you're under. And if they can help, even in a small way, I have employers who are matching just $100, whenever an employee opens a five to nine, they put $100. In it, I have employers that are doing $100 a month, they're doing a $1,200 a year contribution to a 529 plan account. And I've one employer that's very well known that is giving $1,000 in a 529 contribution, along with my book, which I'm so honored about to educate the employee about five to nine, that's what they give one, an employee has a new addition to their family. And I think that's terrific. But anything an employer can do. Just the educational loan, if they don't want to do anything else, I think can be extremely valuable. So let's start a movement on this.

Natalie Gross 31:10
Well, we've talked a lot about, you know, 529s. But Patricia, are there other recommended savings plans that parents should know about?

Patricia Roberts 31:17
Yeah, there's no any one way to save for higher education. As I said before, what's important is that you do something I happen to know 529 plans best. I've worked with them for 25 years, I've used them for my own son who by the way, I was pregnant with. When I first was assigned the role I was at Citi Group, as a corporate attorney, I was assigned the role of learning about five to nine, so Cindy could get into that business. So that was 1998. He has now grown and developed and graduated his both an undergrad and grad degree debt free, largely due to the 529 Largely due to making sensible decisions with respect to which schools to apply for and to attend, because schools vary greatly in terms of net cost. He happened to get academic scholarships, too. But regardless, those years went by those contributions made a big difference. But other ways to save. Yeah, you heard me speak of these traditional UTMA counselor custodial accounts that parents sometimes set up in a bank, you know that that's a way to save, I'd keep in mind that that money belongs to the child ultimately, and may or may not be used for higher education. I'd also keep in mind for financial aid purposes, assets in a child's name such as that count more significantly, than a five to nine plan which is deemed to be owned by the adult who's typically a parent. So you know, there was a number of reasons why you would or wouldn't want to do that. But that's a way to go Coverdell Education Savings accounts are a way that some parents save, I think it's 2000 a year where the 529, you can put 17,000 a year in so it's a lower amount. And there are I think contributor income limits. I think the modified adjusted gross income must be under 110,000 for an individual or 220,000. The other thing about Coverdale is I think the assets have to be used by age 30. Unless the child has special needs. There are Roth IRAs, which I want to mention starting next year 529 plan balances that are leftover. If a child doesn't use it can be rolled to a Roth IRA. under specific circumstances, the account had to be open for 15 years, etc. But regardless of that, a Roth IRAs another way to go 6500 A year can be invested. I hear some parents and experts talk about annuities and life insurance. I don't know enough about those savings vehicles. And I do hear that there's sometimes a lot of fees involved in them. So I can't really speak to them. But I would say whatever you're looking at, think about control who controls the accounts, check to see if there's income limits, see if there are minimums and maximums each year or initially find out if others can contribute with ease. 529 is the best way to have others contribute. I don't think a bank allows somebody to walk in and make a deposit into somebody else's account, you'd need their deposit coupon like 529 has these very sophisticated gifting tools that make it easy. But look into all of those factors and look into fees and expenses as well because your earnings on the account will be net of fees. So lots of ways to do it. No one way you can do multiple ways at once, but do something.

Natalie Gross 34:45
Fabian and Victoria when you decided this was something you wanted to do, how did you initially go about it and what were some resources that were helpful to you? I'd love to just kind of give some practical tips for parents listening.

Fabian Ramirez 34:58
So there was a couple of ways In which I wanted to start off with Eaton and Eva 529 was like an obvious one, just because it had that college savings on it. And that's what I read. That's what I did. I also thought about the education service, the savings account, the ESA decided to go the 529 route just because of the ease of starting at. And again, the contributions that states can make to it, just like Patricia mentioned, like, it was easy. And I feel like, the easier it is, the more people will actually do it. And so I can literally log on right now. And within a minute or less, I can contribute, I could just type it in, it's already connected to my checking account, it comes right out, I really have to think about it. And it's there. It's done. And so those are just a little things, just easiness then the more easier it is, I know more parents will actually do it.

Victoria Wasson 35:49
Yeah. So when I first started thinking about a 529, because I was in a bank, we worked very closely with financial advisors, and I was able to just sit down with one and ask him, Hey, what's going to be my best options. At that time, I only had my daughter, we were pregnant with my son, my husband had just gotten a new position at work, I had just gotten a new position at work. So finances were looking better, to the point that we thought, okay, we have ourselves set now can we start contributing to our children's education. And so when we sat down, he ran the numbers. And I was just floored by just using simple inflation, not even inflation that we're talking about these days, and how much a month we would have to put away to completely pay for their education. And I said, Well, that's not going to happen. But at least I could set aside a certain amount. So he recommended just going to West Virginia is 529 online, super simple to set up, I was able to set up one for myself or for my daughter and also for my son, even before he was born. And then as long as they were opened in the first year of their life. So my daughter missed out on it. But my son did not West Virginia gave us $100 towards the 529, which was great. I mean, it's not a huge amount. But if you're thinking $100 compounded over 18 years, it's going to become something. And so I just took money that they had already set aside in their savings plans from like maybe birthdays or Christmas that they weren't going to spend on more toys, and I put it into their 520 nines, and that way that can compound over the time and go that route to actually paying for some of their education.

Natalie Gross 37:24
Yeah, great. That's great to hear. Patricia, any last thoughts as we wrap up, I mean, I'd really love to know if you have anything on your website for parents who want to kind of compare some of the state plans or anything like that.

Patricia Roberts 37:35
Sure. So on my company's website gift of, by the way, we offer gift cards that can be contributed to any 529 college savings account, I give these gift cards, they're available 25 to $200, to any for every baby shower, every kid's birthday, every holiday, I'm giving a small, modest, tangible gift and this gift card every time and the recipient of the gift card can then redeem it through our website into whatever plan they have. And if they don't yet have one, they can set one up. But that's one of the things gift of college does. And then we also offer this employee benefit platform for employers to offer 529 As a financial wellness benefit. But on our website, you will see under five to nine plans, you can look at a state map and find information on every state 529 plan. So that's one way to go. And we have that because an employer settings, employees might be in any number of states. So we're just we're not paid by any 529 plan. I don't represent any 529 plan, we just have simple objective information about all plans. That's one place you can go. Another place you can go and you should go is to your state's 529 plan. You don't necessarily have to go through my company's website or somebody else's, just Google Maryland five to nine or West Virginia, five to nine and you can go directly to their website, the states have really exceptional information online. There's also a website called Saving for That sort of compares all of those plans. And you can compare them in terms of their investment options, the fees and expenses, other things about the plans. That's something you can do. You do not need to work with a financial advisor, but it's a great idea. If you have a financial professional in your life with whom you're working for other purposes. Why not talk to them about college planning, college planning, the investment you will make will likely be the second largest investment second only to home purchase in your life as a family. So if you've got somebody you're already talking to about financial planning, why not mention this to them and get their perspective on it. But many many individuals go it alone. They go to the state website they find what they need. And they set it up as we heard from Fabian, but it wasn't that difficult. And they have call centers where you can call for information. So I would say, you know, certainly go to my website gift of, saving for directly to the 529 plans themselves. Or talk to a financial professional if you have one, or if you've been meaning to get one, you know, this would be a good topic to discuss with them. But I think most financial professionals feel good about the 529 plans and will guide you to them, whether it's through something they sell on their own they offer or in the case of Victoria, it seems like they sent you directly to the West Virginia direct plan, which many advisors do if they're familiar with the plans. So that's what I would say. And I would say that it is possible to have a really favorable outcome you don't need to save at all, whatever you can save is that much less that the child will need to borrow. And keep your eye on what that future what you want it to be. And it can be that if you take small, consistent steps to get there.

Natalie Gross 41:08
Wonderful. Thank you so much, Patricia. And to you, Victoria and Fabian, for joining me today. Listeners, you can find out more about Patricia at gift of that website she mentioned. Also check out where we have all of our podcast episodes plus videos and more.

Natalie Gross 41:35
That wraps up our show for today. We appreciate you listening to Newbies. Don't forget to check out our sister shows Preggie Pals for expecting parents, Parent Savers for moms and dads with toddlers, the Boob Group for moms who get breast milk to their babies and Twin Talks for parents of multiples. Thanks for listening to Newbies your go to source for new moms and new babies.

Disclaimer 42:00
This has been a New Mommy Media production. Information and material contained in this episode are presented for educational purposes only the statements and opinions expressed in this episode are not necessarily those of new mommy media and should not be considered facts. While such information and materials are believed to be accurate. It is not intended to replace or substitute for professional medical advice or care and should not be used for diagnosing or treating healthcare problem or disease or prescribing any medication. If you have questions or concerns regarding your physical or mental health, or the health of your baby, please seek assistance from a qualified health care provider.

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