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The Gift of Education

Managing Your Finances

Today's Blog Post was written by Tonia Peasley


Gift giving season is upon us.  We here at C.L. Sheldon & Company can't wait for the snow and festivities to come! Who am I kidding - I'm sure "can't wait for the snow to come" can be removed from that statement!  Nonetheless, I want to share some ways to give the gift of Education and Financial Literacy to those around you.

The gift of Education can't be beat; Opening up a college savings plan can be one of the best ways for you to share your love of education and, at the same time, benefit you as well.  A 529 Plan is an education savings plan that allows you to save for qualified education expenses. While the 529 Plan was developed to allow families to save for college, its mandate has since been expanded to include K-12 tuition at private schools as part of the changes from the 2017 Tax Cuts and Jobs Act.  

One major thing to be aware of: the child you are wanting to open the plan for has to already be born and have a Social Security Number.  You also have the option of changing the beneficiary on a pre-existing 529 Plan, so you can essentially use it for several generations of children or grandchildren.  The IRS provides rules for who is considered a qualified family member, and each state’s plan will explain how frequently you can change the plan’s beneficiary. You’ll need to check carefully so you stay within the plan’s rules.  Also, be aware of how the account is invested - older recipients will want to have a less aggressive investment as they move closer to the years of needing to use the funds.

A 529 Plan can offer tax-deferred growth and even deductions on your state taxes for contributions to some plans. Also, these funds can often be used to pay for other closely related educational expenses such as room and board, textbooks, and computers.  Another value of 529 Plans is they can be used in estate planning for grandparents that want to fund their grandchildren’s education, as well as by those looking to create a long-term education family fund.

Pre-paid college funds work considerably different so make sure you understand the pros and cons of these accounts.  A prepaid tuition program allows you to purchase college credits at today’s prices for future use. Credits may only be bought from participating colleges and universities and must be in the name of the plan’s beneficiary. Also, these plans typically can’t be used to pay for future room and board costs, unless there is an optional choice for these expenses.  Pre-paid plans also can’t be used to pay for primary and secondary school education; most however, can be transferred to another sibling if the sibling is still eligible.  Each pre-paid fund has different eligibility criteria, so make sure you review beforehand.


Financial Literacy is also a great gift for older teens and young adults.  Teaching our loved ones to have a good relationship with money can be difficult.  Financial Coaching can provide the educational tools for a newly married couple to combine their finances and step out on the right path of financial freedom.  A new college grad may have student loans, they may have a new job, or they may need someone to help them navigate through structuring their finances.  Perhaps you have a soon-to-graduate high school student and you want to prepare them for the experience of Financial Adulting.  Whatever the case, giving the gift of a Financial Coach to help with individual finances is a gift that will benefit generations to come as they pass on the Financial education they learn.

Finally, you can gift yourself a financially sound future.  Many of us may think we are funding our retirement adequately but are not really sure if we are doing it efficiently.  Financial Planning is the perfect way to determine if your future goals and current savings are in line.  Finding a Financial Planner, you can trust to walk you through the difficult times in life, is worth their weight in gold.  There are always new ideas out there on how to save for retirement; make sure you know which ways are tried and true and in your best interest. 

Have questions about any of these "gifts?"  Reach out to us at C.L.Sheldon & Company by phone or email.  We are always happy to give a free consultation on which service might benefit you and those you love.


If you found this article interesting, you might like the following blog posts:

What Can You Buy With 529 Distributions?


Why Retiring Military Officers May Need to Cash US Savings Bonds Now


VA Education Benefits for Spouses and Kids




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