Putting Educational Goals Within Reach

By Fidelity Brokerage Services

As parents, you want to help your children achieve their goals – both on and off the soccer field. One of the best ways to help them reach their potential is to give them the gift of a college education.

While current market conditions may have you questioning whether or not you have money to put away for college, the rising costs of tuition mean it’s more important than ever to find creative ways to save. MEFA and Fidelity Investments, who offer and manage the U.Fund College Investing Plan (the Massachusetts 529 Plan) have provided the following tips for helping Massachusetts families find the money to save for college.

1. Turn Day Care Payments Into College Savings

Shifting a regular payment already in your budget toward a financial goal is a painless way to turn an expense into savings. When preschoolers enter school, redirect the money you were paying for day care into a savings account for college.

2. Ask Relatives to Contribute

The next time grandparents, aunts and uncles ask for help choosing a gift for your child, suggest a college savings account contribution. Not only does it make shopping a snap, a significant donation can also help your relatives avoid gift and estate taxes.

3. Start Your Own Family Matching Program

When your child receives cash gifts for holidays, birthdays and good grades, offer to match, dollar for dollar, the amount they decide to put away toward future college costs. It gets them involved in planning their education and it’s a great way to begin teaching them the value of savings.

4. Start Early

With college costs rising at a faster rate than inflation, saving when your children are young is the best way to prepare for future college costs. If the parents of a newborn today began saving just $100 a month, in 18 years they could have accumulated more than $42,000*.

5. Keep College Savings Dedicated for College

Avoid the temptation of tapping college savings to cover other expenses. Don’t mix college savings with family savings, and seek out accounts like a U.Fund College Investing Plan account that offers low minimum investments and automatic deposits to make saving easy.

To learn more about the U.Fund, including its investment objectives, risks, charges and expenses, please contact Fidelity for a Fact Kit. Read it carefully. Units of the Portfolios are municipal securities and may be subject to market volatility and fluctuation.

The U.Fund College Investing Plan is a program of MEFA and managed by Fidelity Investments. If you or the beneficiary are not Massachusetts residents, check with your home state to learn if it offers tax or other benefits for investing in its 529 plan.

* Assumes an average annual return of 7%.