This post is part of a series on College Savings Plans sponsored by CHET, the Connecticut Higher Education Trust’s 529 College Savings Plan. As always, opinions remain 100% my own.
This back to school season add one important item to your school shopping list – if your child is starting school, and you haven’t already, learn how to set up a college fund in minutes by opening a CHET account today!
Last year, I nervously sent my oldest baby off to kindergarten. I couldn’t believe how quickly the first 5 years of her life had flown by. While kindergarten marked the start of her formal education, it also made the countdown to sending her to college very, very real. We had just 13 more years to save for college. And if the first 5 years were any indication, it would be here before we knew it. Fortunately, we were able to set up her college fund in mere minutes right online via CHET. Read on to learn how to set up a college fund for your child, no matter their age, today!
How to Set Up a College Fund for Your Child
Have you been reluctant to set up a college fund for your child because you thought it would be complicated? Or maybe you think you need a lot of money or an investment advisor to get it started? The truth is you can open a CHET 529 College Savings account in less than 15 minutes, right online, all on your own, with as little as $25 dollars. It’s easier, and more affordable, than fulfilling your child’s school supply list!
Ready to Start Your Child’s College Fund?
To set up a college fund for your child (or any beneficiary), you will need to complete the online application here. Be prepared with the following pieces of information, and your application will be completed in minutes!
You will need the information listed below for each of yourself, your child or beneficiary, as well as any co-owner, such as your spouse:
- Date of birth
- Social Security Number
- Street Address (no PO Box numbers)
You will also need:
- Investment selection
- Bank account information (for electronic transactions)
Once you have all the necessary information readily at hand, click the big green Open An Account button to get started.
What Investment Selection Should You Make?
I will talk in more detail later this year about how to evaluate your investment selection and allocations for your child’s college fund. You can learn more about CHET account investment options here, but for those with limited financial expertise, I would recommend choosing an Age-Based investment option, also known as a target date fund, based on when you expect your child to graduate high school and go to college. These funds automatically balance investments and risk given your investment horizon and risk appetite.
Related Post: How Do Parents Pay for College?
The more years you have to save for your child’s college education, the more the power of compounding can work in your favor, as earnings grow annually, year after year. You can also take on riskier investments with the potential to earn a higher rate of return in your child’s younger years. Conversely, you will want to invest in less risky options as your child approaches their high school graduation date. Age-Based investment options address this portfolio re-balancing process for you.
Revisit Every Back to School Season
If your child already has a College Savings Plan, Back to School season is the perfect time every year to check in on its progress. Evaluate your monthly contributions, as well as your investment allocation, and make sure funds are growing in-line with your expectations.
Learn More About CHET 529 College Savings Program
CHET is the College Savings Plan, known also as a 529 Plan, offered by the state of Connecticut. If you want to save for your child’s future college tuition, a 529 Plan is the most tax-advantageous way to do so. You pay no taxes on any earnings made from contributions to the plan, and the earnings remain tax-free forever as long as you use the funds to pay for tuition and education-related expenses.
Related Post: What is a 529 Plan? and Why Use a CHET 529 Plan?CHET plans are open to anyone in the United States, but offer special state tax treatment for Conneticut residents on account contributions. State residents receive a Connecticut income tax deduction of up to $10,000 on contributions made to CHET annually.
Be sure to follow my CHET series over the coming months, where I will talk about the best way to save money for kids college funds, optimizing your college fund investments, and how you can allow others to contribute to your child’s college savings too! Follow me at Family Finance Mom on Facebook and Instagram to catch simple solutions for your family’s money problems.