Episode 56: Saving For Kids’ College With Abby Chao From College Backer

Episode 56: Saving For Kids’ College With Abby Chao From College Backer

Saving for kids’ college is an admirable goal, but can sound overwhelming and expensive! On this episode, Abby Chao from College Backer talks candidly about why to save, when to save, how much to save, and where to save! Whether you have no kids, young kids, or even kids already in college Abby offers great tips and hope that it’s never to late to save for college!

Sponsors:

Zeta: Today’s episode is brought to you by Zeta. Zeta is a web and mobile app to help couples stay on top of their big picture finances together. That’s spending, saving, financial goals, debt, retirement, anything that encompasses your net worth. And you can choose to share everything with your partner or pick and choose the accounts and transaction they see, it’s easily customizable. Whether you’re paying off debt, saving for a big purchase, or working toward early retirement, financial transparency is essential in your relationship and Zeta is making that easier to maintain. So check it out at frugalfriendspodcast.com/zeta and let us know how it helps you and your partner. We love hearing your success stories!

The Poor House: Cautioning you to be wise with your money, because they know what it looks like on the other side of frivolous spending and wasteful practices. Your parents always questioned if this is where you really want to send them, what with all your mindless electricity use, and overconsumption of food! The poor house is pleading with you today to practice portion control, turn off the faucet, save for the things you want. The poor house – because they’re running out of bedrooms.

Notable Notes:

We enjoyed asking Abby all the questions about saving for college:

  • When should you start saving for your kids’ college education?

Bottom line: it’s never too late to save. Something is better than nothing and can even increase the likelihood of child’s graduation! Of course – starting early is always ideal!

  • How much should we plan to save & What are the options for where to save it?

How much to save depends on many factors – check out College Backer website for a savings calculator, but keep in mind you do not need to save for your child’s entire tuition; scholarships and your child’s own contribution can help!

  • What are the benefits of using a 529 plan to save for college?

-Money in a 529 can be used on anything related to education

-Earnings are Federal tax free and will not be taxed when money is taken out

-Some states offer further tax breaks with a 529 plan

-The donor is in charge of the account – not the child

  • What happens to a 529 plan if it’s not used?

-A 529 plan never expires and can be used for any individual including yourself if YOU decide to go to college

-If there’s genuinely no use for the 529 plan money can be withdrawn but would be taxed with a penalty fee

BILL OF THE WEEK – Today’s Bill of the Week is brought to you by Zeta because Zeta helps you keep track of all your monetary bills so you never miss a one 🙂

Thanks Abby for sharing your knowledge about congress bills specifically concerning 529 plans. We are so much more enlightened because of you bill!

Lightning Round

  • How did you become passionate about helping people save for college?
  • What is CollegeBacker and how is it unique?
  • Who are the best candidates to open a 529 through CollegeBacker?
  • Where can people find more about CollegeBacker and if it’s right for them?

Visit collegebacker.com/frugalfriends and receive a $10 credit!

Frugal Friends Book Club:

It’s May and we’re reading The Soul of Money by Lynne Twist for book club

  • If you want a free copy, leave us a review on iTunes or Stitcher, screenshot the review and send it to frugalfriendspodcast@gmail.com. We’ll select the winners at the end of the month.

See you next week!

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