The Lifestlye Blog of "HaM"
For the first two years of my son’s birthday, I put all his monetary gifts from family and my personal savings for him into a regular bank account and received literally $3 worth of interest. In 18 years, he would make approximately $100 in interest give or take. That definitely is a measly amount and will not anywhere near sufficient to beat the inflation rate.
I needed another plan. I loosely researched college savings account and read pretty good things about the California Scholarshare 529 account. There were other states that had good programs as well such as Utah but I ultimately decided to go with the Scholarshare account for the following positive reasons:
1. It was highly recommended from a coworker whose kids are now in college
2. The company is now being managed by TIAA-CREF Tuition Financing, Inc. (TFI) which is rated very well.
3. Rates and fees are very competitive and low when compared to other similar 529’s if doing passive portfolios
4. There is no tax benefit for Californians to open a 529 so that sucks, but it is tax-free so that is nice.
5. Money can be transferred between beneficiaries
6. There are 19 portfolios to choose from
Some cons include the following
1. Penalties for withdrawals that are not for college
2. 529’s will count toward the parent’s assets in FAFSA applications
Overall I am happy with my choice. I know there are other great programs out there but I ultimately picked what worked for me. I transferred both my sons’ money over to these accounts and the interest has been great so far compared to a regular banking account. I keep monitor of it fairly closely and chose portfolios I felt comfortable with. I hope to use compound interest as my friend to reach my savings goal for both my kids. I am contributing to this plan every month along with all monetary gifts from family and friends. I am not using my 401K money or chomping at my mortgage to put money in. I am at a comfortable place financially to put the amount I am putting in. I would hope to increase it in the future but that will be after I have paid off my mortgage, my husband’s car, and increase my personal retirement plan to the maximum amount. Once all that is done, I will have money to add more into my kids accounts. Ultimately, if my children choose not to go to college, I will take the hit from the penalties, pull out that money and go on one awesome worldly vacation. 🙂
If you would like more information, feel free to comment below or click on Scholarshare’s website found here.
Note** Scholarshare did NOT pay me in any way to review their plan. I am personally writing my own opinions of how I feel about the plan after choosing to invest with them for the past 10 months. My opinions can change as time goes on but I have no affiliations with the company and these opinions are solely mine.