We have designed dozens of financial plans for our clients, and those who are parents always want to know how much they should save each year on their child’s future educational costs. Our preferred rule of thumb for educational planning is the same as our advice for retirement: it pays to start saving and investing early.
Before I went on maternity leave, we had an example of telling a client that they could fund a college education if they started paying $ 6,000 a year or $ 500 a month on their child’s 529 plan save at a private university (estimated at $ 35,000 in today’s dollars). If they waited just four years to start funding the 529 plan, that annual contribution would have to increase from $ 6,000 to $ 9,000 to achieve the same goal.
Even with these motivational numbers, opening your 529 account (collecting papers, setting up an account) takes some time and can seem so annoying that it’s lower on your to-do list.
What did I learn about opening 529 plans during my maternity leave?
All you need is the social security numbers, addresses and dates of birth of your partner and your child to open the account. Once you have that, it will take you a minute to open the account. Much less time consuming than I imagined! Many of the states that offer online access to 529 plans make it very easy for friends and family members to send cash gifts to the account. In less than ten minutes on a February morning, I had our daughter’s 529 plan set up and emailed with instructions to her grandparents (who had requested the information) to send a gift. Less than a week later, the first gift hit the account and was immediately invested in the market, ready for the compound interest miracle.
It takes a village …
Let’s dispel the idea that parenting is all kisses and cuddles. Yeah it’s amazing. But it’s also a shock to the system. There have been so many times in the first three months that I panicked inside and didn’t feel like it was okay to ask for help. Fortunately, with the help of my therapist and some great mom friends, I learned to ask specific questions about what I needed.
The grandparents’ visit brought me to tears at first as I expected to entertain them while I took care of our brand new baby. I learned that our parents wanted so much to help but also didn’t know how. Something as simple as asking to be able to pick up lunch on the way there, to be able to communicate, made both me and my parents very happy. Don’t be afraid to express your worries and needs to those who care most.
When Covid restrictions eased and vaccines came in, friends asked to come over. Instead of catching up all the time, I learned to ask if they wouldn’t mind watching the baby while I snuck into a coveted shower.
Suddenly experiences that had previously caused fear turned into moments of grace, moments that I now look back on and for which I am so grateful.
I have learned a modest amount of lessons since our daughter came into this world, and I know they are only a fraction of what is in store for the next eighteen years. Some of these lessons blinded me; others felt easier to understand with the help of others. Motherhood is a crazy challenge, but finding little moments to pause and reflect to be critical and analytical has already been transformative. I hope this post helps others find the same space and look forward to sharing more lessons as I continue my journey into parenthood.