Of all the gifts you'll give your child, few will be more important than a college education. But affording that education requires many families to make a plan.
On average, college tuition triples every 17 years. Is it worth it? Absolutely. According to the U.S. Census Bureau, college graduates will earn an average of $1 million more over their lifetime than a high school grad.
This week, we want to tell you about a new app to make saving for college even easier.
The office of the Arkansas Treasurer of the State recently announced the launch of the new Arkansas 529 GIFT Plan app. This is the first state-run 529 plan in the country to launch a smartphone app.
The new Arkansas 529 GIFT Plan smartphone app allows account owners to:
View account balances; view transaction history; get deposit and security alerts and stay up to date on news concerning their plans.
The app will also help the Arkansas 529 GIFT Plan share pertinent information with account owners.
529 plans were established to help parents and grandparents save money for college that can be used at schools across the country and some institutions abroad. (The name "529" refers to the Internal Revenue Code section that discusses this type of college savings tool.)
Arkansas taxpayers can deduct up to $5,000 (up to $10,000 for married couples) of their Arkansas 529 GIFT Plan contributions from their Arkansas adjusted gross income. If you are a resident of Arkansas, your earnings are state-tax free if withdrawn to pay for qualified higher education expenses.
Saving even a little can be more cost effective than borrowing. While most families combine some level of saving and borrowing when paying for college, putting aside money early and often is a good way for you to build your savings. Saving and investing even a little each month can be more financially prudent than borrowing money and paying interest on it.
The Arkansas 529 app is available for free download in the App Store and Google Play. You can learn more about starting an Arkansas 529 investing plan at www.arkansas529.org.