"Isn't that part of the curriculum requirement?" I had no idea. Things have changed and times are hard, which is why they are putting more financial responsibility on the parents. I know preschool is optional, but kindergarten should not be part of your household budget process.
She indicated that husband and her were going to cut down on savings to pay for tuition for both children. One kindergarten and one preschool. Luckily they have the third child 2 years behind so they can take my suggestions to heart.
In case you're wondering. They started saving for college since the children were born. However, they were putting funds into a 529 Collegs Plan not knowing the possibilities of needing the funds sooner. In their case a Coverdell Education Savings Account would have been better.
Let's explain some differences:
529 College Saving Plan:
- No taxes on capital gains
- Will only be used for higher education
- Anyone (tax bracket) can contribute
- Invest in mutual funds
- Min contribution $25 per plan and over $300K per beneficiary
Coverdell Education Savings Acct
- Tax advantage
- Can be used for any tuition, books and supplies from elem to higher education
- Qualified tax payers with earned income max (married $220K, ind $110K) per yr.
- Max contribution $2K yearly
- Have to be used by 30 yrs old, if not, withdraw(w/penalties) or rollover into another family member Coverdell Savings Acct.
There are other features to each plan. I would suggest you contact a financial consultant for all the pertinent details.
In their case a Coverdell Education Savings Acct would have been in the best interest of the family. Now they have to cut contributions from savings and not take advantage of the investment features.
Be inspired,
Bahiyah Shabazz
1 comment:
Finally getting over here to pay you a visit. Gonna send you an email.
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