flag image

College Choice

Spring Clean….Your Finances!

April 01, 2008
With springtime just around the corner, many families are probably gearing up for that dreaded weekend of chores known as "spring cleaning." Dusting those lampshades and polishing the countertops are certainly an important part of the spring cleaning practice. However, the house is not the only part of your family's lives that may need to be scrubbed, scoured and washed. Your finances may need a little tidying up as well!

Many of you may already be examining your financial statements and investment portfolios with the onset of tax season. But it's important to really scrutinize your family's budget in order to save appropriate sums in the most suitable vehicles.

Most families are faced with the home mortgage, car and insurance bills. But after those necessities are paid, the next largest expense a family will incur is a college education. And currently, the cost of that education has been rising faster than the rate of inflation. That's why it's important to begin saving as early as possible and in the most fiscally advantageous vehicle possible—an Indiana CollegeChoice 529 Investment Plan.

The CollegeChoice 529 Investment Plan is a tax-advantaged college savings tool that provides a wide range of investment options. But more importantly, it now offers a 20 percent income tax credit up to $1,000. Let me reiterate—a tax credit, not deduction, of up to $1,000! This is a direct 20 percent return on your money. So you'll not only be saving for your children's futures, you'll be rewarding yourself at the same time.

The earnings in a CollegeChoice 529 Investment account are exempt from federal and state income taxes when used for qualified education expenses. So your money grows tax-free and can be withdrawn free of taxes when used for education. Even better is the fact that any Hoosier can contribute to a CollegeChoice Plan and also receive the 20 percent tax credit. So not only can you benefit from saving for your child's college education, but grandparents, relatives and friends can too.

Besides offering the best tax advantage in the nation, Hoosiers also receive a number of other benefits in the CollegeChoice529 Investment Plan. Sales charges are waived when Hoosiers invest directly without the use of a financial advisor. In addition, Hoosiers do not pay a State Authority fee that out-of-state participants must pay, and they enjoy a reduced maintenance fee. Even that can be waived if you contribute to your account monthly through payroll deduction or systematic investments.

It is estimated that sending today's newborn to a public university in 2026 will cost more than $170,000 for a four-year degree. For a private institution the cost could rise to as much as $350,000. These amounts may seem impossible to save, but they are attainable if you have a plan—especially if you begin saving early in a CollegeChoice 529 Investment Plan. Even if your family can't save enough to cover the entire cost, you can take solace in the fact that your child will graduate with far less debt than those who are forced to borrow for their entire education.

So don't delay! After you're finished scrubbing those floors and cleaning out those drawers and closets, polish your financial portfolio. If you have money you are currently saving for college in other education accounts, consolidate that money into a CollegeChoice account and take advantage of the 20% tax credit. Begin saving now for your children's futures.

Richard Mourdock is the State Treasurer of Indiana.

Comments ()
Childrens museum
St. Francis
Race for a Cure