This is not a sponsored post. I earn no commission if you open an account.
“How are you going to pay for all those kids to go to college?” is a question that I get really tired of hearing.
First of all, college isn’t necessarily my goal. Click the previous link to find out what they are.
Do I want my kids to pursue college just because of the nobility of education? You betcha.
In fact, my own dream job is to be a professional student getting degrees in everything that catches my eye.
This is one reason I started this blog. I would love to make enough money at this to completely support my family so my husband can stay home, and I can go back to college for as long as I want, debt free.
Anyway, I digress. How can large families afford to save money for their child’s futures? This is a real and important question.
It’s my job to answer it for you.
Arkansas 529 Plans
I have recently learned about Arkansas 529 Savings Plans! Before I go any further, let me tell you that while the plans and funds are kept in Arkansas accounts you can open one from anywhere in the US, and you don’t have to be a resident of Arkansas!
So what is so special about them?
First, these are low capital accounts! You can open one with only $10 and have monthly contributions as low as $5 with direct deposit. Sounds too good to be true, right? Well, I assure you, it's not. You can choose to save more than this, but you don’t have to.
I know what you are thinking! “At that rate, even if we start at birth, we will never save enough to pay for college!” That is a valid concern and 529 accounts have a couple of neutralizing it.
First, you can choose to invest your savings in the stock market through their partner Vanguard, a trusted name in investments.
This means that your capital (the money you save) can actually earn you more money with no effort! And you can choose between high-risk and low-risk portfolios.
Second, you can choose a plan that requires bigger deposits as the child nears graduation. This gives you time to find other revenue streams or cut costs to help save.
Third, the UGift option, allows you to send links to family and friends for them to make one time deposits as gifts. What a better birthday gift than the promise of a future? Plus, they can also deposit by mail or transfer if they don’t have access to the internet.
And I saved the best for last: The UPromise option. Upromise is actually a program and community of like-minded individuals that are learning about the best savings strategies. When you join the program, you also get a certain percentage of everyday purchases back in the form of deposits! So yes, groceries, travel, and many other things actually help you save!
Tax Incentives and Fees
529 plans are exempt from certain taxes meaning more of your money stays in the account as long as you use the funds for college, university, or trade school. You don’t have to pay taxes each year on the account, either. And you can deduct some of the deposits from your taxes, too.
Fees are minimal and are based on how much is in the account. Out of state account holders do have to pay slightly higher fees, but these usually are no more than $20.
What if you don’t need the funds for college?
Personally, I know there are many ways to success that aren’t traditional college. 529 accounts can also be used for trade schools with many of the same benefits listed above.
You can also withdraw the funds for any other reasons, but the tax incentives are revoked and you must pay taxes on the funds.
If your child is going to college or trade school, and they get a full ride scholarship, then you can transfer the funds to another beneficiary. That just blows my mind. So you can start saving for one child, but end up paying for another’s college with! Because we all know that large families need that kind of flexibility.
You can even use the funds to pay for another child’s K-12 schooling. This applies to private and religious schools if you need to quit homeschooling.
If you are ready to read more about Arkansas 529 plans then click here to be transferred to their website.
Hi! I am Ali, a homeschool mom who is passionate about science, managing my money and time well. Unfortunately, with an army of tiny faces, I am always still kind of a mess.
I was tired of not having a judgement free place to talk about money troubles with other moms. So I created one!
Click on the picture above to join my Facebook Group, Money Savvy Mommas.