The 30th episode of the ‘Heart of Money’ podcast, hosted by Austin Bl and Bob Wessler, centered on the important topic of saving money for college. They shared personal experiences and advice about college savings plans, underscoring the benefits and limitations thereof. Bob detailed his approach for managing his children’s college savings, emphasizing advantages like educational discounts and scholarships. Austin, a novice in the process, shared his utilization of the post-tax 529 savings plan that offers tax-free growth when used for education expenses. The hosts exhaustively discussed two main avenues for funding higher education – the Education Savings Account (ESA) and the 529 plan, pointing out their unique features and limitations. The listeners were urged to continue researching and consulting with professionals, given the continuous evolution of these plans. The importance of seeking all available scholarships, regardless of eligibility criteria, was also stressed. The podcast concluded by underscoring the significance of early investments, consistency, planning, and professional advice in making higher education financially manageable.
Key Points and Quotes Highlighted:
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College Savings, Money Management, Higher Education, 529 Plan (00:00:00 – 00:11:53)
The 30th episode of the ‘Heart of Money’ podcast with hosts Austin Bl and Bob Wessler focuses on the topic of saving money for college. They discuss how this is a pertinent issue, especially during the graduation season that occurs in May. The hosts share their personal experiences and advice about college savings plans, highlighting the benefits and limitations. In particular, Bob discusses how he is managing college savings for his older and younger children, highlighting benefits like educational discounts and scholarships. Austin, who is just beginning this process for his young children, discusses his usage of the post-tax 529 savings plan, in which the growth of the fund is not taxable when used for education expenses. The conversation aims to provide useful insights for listeners saving for higher education. -
Educational IRA, College savings plans, 529 plan, Scholarships (00:11:54 – 00:35:27)
The meeting primarily discussed various options for funding higher education, and the differences between two specific plans: the Educational Savings Account (ESA) and the 529 plan. The ESA, once known as the Coverdell ES A, now operates more as an Educational IRA and serves as a retirement vehicle specifically designed for education. There are income-dependent limits on who can contribute to it. The 529 plan offers more flexibility, enabling even grandparents to contribute to a child’s education. However, like the ESA, it also has certain restrictions, especially concerning beneficiaries and the use of the funds. Both plans have evolved over the years and thus, continual research and consultation with a licensed professional is encouraged. Additionally, participants also discussed the importance of applying for all available scholarships, irrespective of eligibility criteria, as the financial impact can be significant. They concluded that early investments, consistency, planning, and professional advice can effectively render higher education financially manageable.
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