Disclosure: This post is sponsored by the Florida Prepaid College Board, through my role as a Believer Blogger. All thoughts are my own.
Eight dollars and ninety-seven cents.
I am not proud of the fact that this is the balance of my college sophomore’s Florida 529 Savings Plan.
Years ago, I opened a Florida 529 Savings Plan for her at a time when my employer was offering to match my contributions. When our family experienced several financial challenges (too much debt compounded by job loss), I stopped making contributions to the account and withdrew most of what had accumulated, since we were in survival mode.
529 Savings Plans Fill Gaps
To be clear, we were ahead of the college finance game compared to many Florida families. We were extremely fortunate that my parents had generously purchased Florida Prepaid contracts for our children when they were infants (more on that here and here).
Two years into my daughter’s college experience at Valdosta State University, though, and just over a year before my youngest child graduates from high school, I think often of the additional “breathing room” I would have if I had kept up my Florida 529 Savings Plan contributions (and unlocked my employer’s matching contributions). We could have avoided the student loan debt we have incurred.
By “breathing room,” I mean expenses like:
- mandatory fees
- room and board
- textbooks and supplies
- other equipment that is required for enrollment
One small hurdle when I opened my children’s Florida 529 Savings Plan accounts was the minimum required contribution. The Florida Prepaid College Board has removed the minimum contribution requirement. You could start with, for example, $8.97.
How is a Florida 529 Savings Plan Different from a Prepaid Plan?
- Unlike Prepaid Plans, the Florida 529 Savings Plan does not have a set payment amount or schedule.
- A family can contribute as much or as often as desired, and accounts can be opened at any time. There is no minimum contribution to open a Florida 529 Savings account, and there are no application fees.
- The biggest difference between the two is that the Florida 529 Savings Plan is subject to fluctuations in the financial markets, while the Prepaid Plan are is guaranteed by the State of Florida.
- There are 11 investment strategy options, including an age-based option that gets more conservative as the beneficiary gets closer to college age.
To learn more about Florida 529 Savings Plans and the Prepaid Plan, please click here.
Opening a Florida 529 Savings Plan is Simple
If you don’t have a Florida 529 Savings Plan already, click here to start!
You Could Win a $529 Scholarship!
The Florida 529 Savings Plan Scholarship Program is new! In conjunction with 529 College Savings Day (observed on May 29!), it will award 10 winners a $529 Scholarship deposited into a Florida 529 Savings Plan account. Families can enter to win between May 1 and May 29, 2016 via this link!
Only legal residents of the state of Florida who are currently over the age of 18 are eligible to enter. Winners will be selected from among all eligible entries via a random drawing to be conducted on June 1, 2016, at 3:00 p.m. Eastern Time.
A Lesson Learned
I wish the balance on my daughter’s 529 Savings Plan was $897, $8097, or more instead of $8.97, but it is not. If you are at an earlier stage of planning for your child’s college expenses, I simply urge you to consider the role a 529 Savings Plan can have for you.
If nothing else, go for the scholarship!