(March 16, 2022) It is already that time. Although we don’t want to admit it, we must. It’s tax season. Those two words alone can make teeth grind and headaches emerge. Most of us will ask ourselves “When will I have the time and energy?” seemingly over and over before finally sitting down to get started. Not only that, but are all documents and passwords needed to file in order? While these are dreaded questions, there is another that brings a bit of joy and hopefulness. If receiving a refund, where should it go how will I use it?
Will we ignore the irresistible urge to spend it all on a vacation, toy, gadget, or a new wardrobe? Can we get ourselves to “do the smart thing” and save it?
Many of us save for retirement, holiday funds, a new car, or just a rainy day. Another wonderful option, often overlooked during tax season, is future expenses for your child’s education. Higher education is a concern that can easily be procrastinated. However, before you know it, it will arrive without notice just like tax season. Even if just part of your tax refund is saved in a 529 account, a dollar saved now is one less dollar you may have to borrow in the future.
One of the most effective tools for successful saving is automation (or as we like to call it: ‘Set it and forget it’). Once you establish an account, perhaps with your tax return, scheduled, automatic deposits are one of the best ways to continue great savings habits. Additionally compound interest will factor in by allowing your original investment, as well as the interest earned over time, to compound and grow. Washington College Savings Plans (WA529) is here to help with your higher education savings journey. Visit us at 529.wa.gov.
By Vince Meyer