When 4-year-old Afton Barron gets to kindergarten, she'll attend a college graduation for the first time. She'll present a graduate she doesn't know with a candy necklace.
Each year, the Utah-based Barron family attends a local college graduation so their daughters can present graduates with the necklaces – part of parents Randy and Janae Barron's plan to introduce their children to the idea of saving for a college education from an early age.
All of their children are responsible for kicking in half of the money for their 529 college savings plans, tax-advantaged higher education investment accounts. The Barrons' three daughters accumulate college savings through birthday and holiday gifts, essay contests and community service awards.
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Saving for their educations builds a positive attitude as much as it builds college funding. "Nothing builds a child's confidence more than investing in their own future," says Lynne Ward, executive director of the Utah Educational Savings Plan. When children participate "in saving for their own college expenses, they not only learn the value of saving but also make a commitment to achieve a higher education."
To get children to help contribute to their own college funds, check out the four tips below offered by the Barrons and a financial expert.
1. Match funds when possible: The Barrons match contributions their three girls deposit into their individual 529 plan accounts. The girls get excited seeing their money double.
When 14-year-old Morgan was in elementary school, she earned a $600 cash prize from an essay contest. Her parents added $600. Mom Janae recounted how Morgan's older sister Amber told her, "You're rich!" after learning of her sister's $1,200 total.
The excitement continued when they won other contests. Janae recalls one instance where both of the older girls won savings bonds. Amber, now 17, decided to cash out her savings bond so she could double it with her parent's contribution, since the Barrons only match 529 plan deposits. Morgan said, "Yeah, yeah, let's cash our savings bonds."
For an additional incentive, the Barrons offer to completely pay for graduate school for any of their children who graduate from college.
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2. Let the state chip in: Check to see if your state offers a matching grant program, says Dale Ellis, 529 plan project coordinator for the Arkansas State Treasury. A matching grant is where a state plan matches money deposited into the account by parents or others.
The good news is that the state typically doesn't take into account who puts money into the plan, he says.
If a state provided matching funds, a child could deposit $250, the parent could deposit $250 and the state plan would add $500, for a total of $1,000 added to college savings. State matching funds could continue for as many years as an individual plan allows, Ellis says.
[Learn more about taking advantage of state 529 matching.]
3. Have a clear conversation about financial responsibility: The Barrons send the children family expense reports. Before their children pick a career field or guess at the cost of a college education, the Barrons want them to understand the costs of living both during and after college.
Randy sent his eldest daughter an email that included the annual cost of her cellphone, $500, and the cost to fix the family van that she drives, $3,000. He also mentioned auto insurance costs. The Barrons believe it helps their children choose career fields to study with enough potential income that they could support a family.
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4. Share 529 plan statements: The Barrons show each daughter her 529 plan statement every quarter. They want their children to know how their contributions have added up.
Middle daughter Morgan has nearly $5,000 in her account. About $2,000 came from her contributions, $2,000 from her parents' matching funds and $1,000 from investment earnings.