Give Your Kids a Valuable Lesson on “Teach Your Child to Save Day”
The NC 529 ® Plan Encourages Parents to Talk to Their Kids about Saving Money on April 28
April, 2017 (Raleigh, NC) – April 28 is National Teach Your Child to Save Day and the NC 529® Plan is encouraging parents to turn their tax refunds into a teaching tool.
According to a study out of the University of Cambridge, most children develop money habits while in elementary school which they will carry the rest of their lives. These habits are formed, in large part, by watching how their parents interact with and make choices about their money. That’s why the NC 529 Plan (also known as North Carolina’s National College Savings Program) hopes parents receiving tax refunds will consider using that money to boost their children’s college savings accounts.
“The earlier parents include young children in conversations about managing and saving money, the better financial skills the children will develop,” says Michael Ochsenhirt, NC 529 Savings Program Services Manager. He continues, “When they include discussion about saving for college, parents not only help their children gain valuable financial skills, they help them visualize college in their future.”
According to the authors of a study from the University of Minnesota, children learn their money habits from the examples set by their parents, teachers, and other trusted adults. And studies have shown that when adults don’t teach valuable money management skills, the effects on the child’s ability to manage money down the road can be far-reaching.
For parents who want to share money-saving lessons with their kids:
- Start early. Kids are naturally curious, so a quick budgeting or saving lesson while you’re going about your day can make a difference.
- Make children a part of family budgeting. Help them see how you decide what to spend your money on and how you accomplish your financial goals.
- Help kids learn to defer gratification. Most adults know that sometimes you have to wait a while to be able to afford the things you really want. The earlier your kids learn this lesson, the better off they’ll be when they become independent and are confronted with financial choices of their own.
- Show, don’t tell. It’s one thing to advise your children to save, but it will make more of an impact if you take action and actually put money away. Save for things, such as their college education and your retirement, to drive home the point that you can accomplish more with money you saved over time.
- Share the goal of saving for college with your child. Particularly in the month of April, if a tax refund is available, show your child you are investing this money in his or her future. Perhaps start talking with grandparents and other family members who may want to contribute to the child’s college savings too instead of giving toys or clothes on holidays or birthdays.
Earnings on NC 529 Accounts are free from federal and North Carolina income taxes as long as money is used for qualified higher education expenses such as tuition, room and board, books, fees, computers and other required equipment. And the money isn’t just for use at North Carolina colleges and universities. It can be used at almost any college, anywhere in the country.
With highlights of the NC 529 Plan available at NC529.org and additional detail on the savings program on the College Foundation of North Carolina website, CFNC.org, it is easy to get comprehensive and free information and guidance about planning, applying and paying for education beyond high school. To learn more, call toll-free Monday – Thursday 800-600-3453 (for NC529) or 866-866-2362 (for CFNC) between 8 am – 8 pm or Friday 8 am – 5 pm.