Meg from Missouri wrote in about 529 plans and her generous in-laws:
I recently discovered your podcast and am really enjoying it. I have a 529 question that I am having trouble finding the answer to. My husband and I have a 5-year-old, 3-year-old, and 1 year old. My in-laws have been wonderful and opened 529 plans for each of our kids on their 1st birthday. They contribute $600/year to each child. We are beyond lucky to have such a generous family. My husband has finally finished his medical training. We have purchased a home and are now able to start contributing to the 529 plans.
My question is … Can a child have more than one 529 plan? We live in Missouri. Our in-laws opened 529 plans that are not associated with our state of residence. Can we open 529 plans that would allow us to take advantage of tax benefits for the state of Missouri or can a child only have one plan?
Our question of the month comes from Joe from South Dakota:
Like you, I have a young family (wife + 2 young kids), a house, and a blessed life. However, I do have a mountain of student debt (~200,000) that I have accumulated through a doctorate in Chiropractic that creates considerable stress in our little world.
According to Student Loan Hero, the average student debt for 2017 graduates is close to $40,000. And our nation’s total student debt is now hovering around $1.5 TRILLION!
I want to do everything in my power to protect my kids from this colossal disaster.
To help calm my nerves, I’ve invited Pam Andrews on the show today. We’re gonna chat about how she helped her son earn $700,000 in college scholarships. Pam’s son can now attend college and graduate completely debt free … and then some.
Abby Chao is the Co-Founder of CollegeBacker. She and her company are on a mission to make saving for college easy with the magical 529 account.
Abby and I met a dinner in Dallas in October. Her enthusiasm for combating the $1.4 trillion student loan crisis in our country was inspiring. I had to bring her on the show so you all could be inspired too.
Evidently, 70% of families in the US are not aware of the incredible benefits of the 529. We’re going to help with that today.
From the expo floor of FinCon17, I’m speaking with Award Winning Personal Finance Author Erin Lowry about her new book Broke Millennial. Her goal is to help young adults to stop acting rich and get their financial life together.
One of the major topics in the book is getting financially naked with your partner before marriage. Given the importance of this crucial money conversation, Erin and I intently focus on that topic during our chat today.
Reaching financial independence takes a whole lot of drive and determination. It definitely does not come to us overnight. There are difficult steps that we must take to earn the truly awesome rewards that come with owning our own time and choosing the direction of our day.
One of those major milestone steps is escaping the grips of student loan debt.
Recently in the US, Student Loan Debt exceeded credit card debt and surpassed the $1 Trillion mark for the first time. In our great state of Michigan, the average student loan total is around $35,000. When you’re barely making that much as your starting salary, eliminating those loans can seem like a constant uphill battle.
Student loans have become so commonplace in our country that everyone seems to be living with them. According to Forbes in February 2017, there are over 44 million people in the US living with student loans. Those loans amount to over $1.3 trillion dollars!
And it’s not just the nation’s millennials that are carrying around this heavy debt burden. Seniors receiving social security checks are starting to see their benefits reduced in order to pay back student loans they’ve owed for decades.
One sign of hope coming out of the huge student loan crisis lately is that parents are starting to save more for future college expenses. According to Fidelity in 2016, families saving for college has increased from 58% to 72% over the past 10 years. With the cost of college increasing steadily, the more savings we have, the better prepared we’ll all be as parents.
The cost of college is completely out of control. Every year, the cost to attend a 4-year university increases by twice the inflation rate. To put it in some more personal terms, by the time my 5-year old little girl goes to undergrad, we’ll need around $200,000 to make a 4-year in-state university a reality. Did I mention I have two kids?!
The other major crisis affecting our country right now is the massive amount of student loan debt we all have. According to Time in 2016, more than two-thirds of college grads graduated with debt, and their average debt at graduation was about $35,000. According to that article, this number will be tripling in the next two decades.