How a military family can save for a child’s college fund
The moment your child is born the clock starts ticking towards the thought of higher education and what the future may bring.
If you are a military family, your family’s service and sacrifices may have earned you benefits to assist in your child’s education through the post 9/11 GI Bill making it seem less critical to invest in a college savings account for your child. According to Sallie Mae, just 56% of parents are actively saving for their child’s future education.
However, life happens and things change and it’s our responsibility to be prepared for the unknown. For example, the eligibility and transfer of the Post 9-11 GI Bill changed on July 20, 2019. Some service members have found themselves ineligible of transferring education benefits to their children. This can be extremely detrimental to those families who did not have additional education savings account established for higher education and who have children who are quickly approaching their college years.
Military families should start saving for their child’s future early by investing in a 529 plan. There are two types of 529 plans and military families should do their homework to determine if a prepaid tuition plan or college savings plan is right for their family. Some benefits of the 529 Plan include:
- Ability to choose your plan type
- You won’t be taxed on your plan’s earnings used on eligible college expenses
- You can sign up for any state’s plan
- Anyone can contribute
In addition, parents should consider a youth savings account through a Defense Credit Union. These accounts not only allow you to save for your child’s higher education but provides an opportunity to teach your child the benefits of saving money and the differences between needs and wants. Establishing a savings account will allow you to start teaching your child healthy financial habits from an early age.
Just think, establishing a savings account will not only save for your child’s future but provide an established history with a credit union that will support them as they invest in their future, might that be their first vehicle purchase or even first-time home purchase.