tuition

We all know college is expensive. In 2019, the average sticker price of an in-state public college education was $10,116, while private colleges average a whopping $36,801. With the ever-increasing price of sending kids to college, more parents than ever feel the need to find ways to save for their children's college expenses.

529 college savings plans' popularity and growth have continued to rise since their creation under the Small Business Protection Act of 1996, but studies still show that most Americans still don't know what a 529 savings plan is. We break down the basic pros and cons of 529 plans, giving you a better understanding of how they work and if they may be the right college savings vehicle for your kids.

What Is a 529 College Savings Plan?

529 plans are tax-advantaged investment accounts that are state or state agency run to save for college expenses.

There are no income, age, or contribution limits to 529 savings plans. You don't have to worry if the account beneficiary doesn't go to college right away; they can use it whenever! Additionally, the beneficiary of the plan can be changed to another family member. This means that, as the account owner, you can transfer it to another family member, including yourself! Parents can feel better about staying in control of the money, too. Unlike UGMA (Uniform Gift to Minors Act) and UTMA (Uniform Transfer to Minors Act) accounts, the custodian of a 529 savings plan always stays the owner; it will never switch over to the control of the beneficiary. This means parents can rest assured that their child can't withdraw the money to purchase the Mustang they've been eyeing!

The most obvious disadvantage to 529 plans is that you are limited to withdrawing the money only for college expenses. If withdrawn for any other reason, you may be subject to income tax along with penalty expenses on the earning portions of the account. Luckily, the list of qualified college expenses is vast, including the most recent addition to the list: student loan payments.Since 529 plans are run by states and institutional agencies, a big concern is whether or not the plan that is opened will transfer easily if the beneficiary ends up going to college out of state. In most 529 plans, your choice of college is not affected by the state in which it was opened.


Tax Benefits

Most states offer a full or partial tax deduction for 529 contributions. Some states even allow a tax credit for the contributions. Account owners can also feel better knowing that the earnings grow tax-free and will never be taxed as long as the money is used for qualified expenses.

Investments

Most plans are low maintenance and have automatic investment management options, which means less work and worry on your end. Many 529 plans use target-date funds, which change based on the beneficiary's age and become more conservative the closer they get to college age. These types of funds can be great for the account owner, who wants to be able to "set it and forget it." but it can also be troublesome for those more involved with managing their own investments. Account owners can only make investment changes twice a year in 529 accounts (there is a loophole for this if you switch the beneficiary; then the investment change limit is reset)

529 Plans' Effect on Financial Aid

There is much debate over how a 529 plan can affect a college applicant's ability to receive financial aid. A lot of factors go into the decision-making on FASFA (free application for federal student aid) forms, so it's important to look into each individual case. Since student assets are assessed at higher rates than parents', in most cases it is best to keep the account in the parent's name. However, 529 accounts owned by a grandparent will be counted on the FASFA application as the student's assets, so it will be assessed at a higher percentage.

In my personal opinion, as a former personal banker and mother of two, 529 plans are the best way to save for college, as long as you start early– it doesn't make much sense to open one if your child will be attending college in just a few short years. The best advice I can give people is to act early, set clear goals for the future, and meet with a financial professional to discuss your exact situation.

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College is expensive, and tuition rates are rising year by year. Lots of students turn to academic or sports-based scholarships to help cover the cost, and over the past few years, some students are even getting scholarships through online gaming. It's no surprise that the rapidly growing videogame space is making its way into academic institutions, given that esports are expected to be a $1.5 billion market by 2020.

That means that, just as many people ritualistically sink into their couch for Sunday football, more and more fans are going to be logging onto various sites — like twitch, the massively popular streaming service bought by Amazon in 2014 for $1.1 billion — to watch their favorite players compete in games like Fortnite or DOTA. According to the New York Times, "Over the past two years, the National Association of Collegiate Esports, which is engaged with 98 varsity programs across the United States and Canada, has helped to facilitate $16 million in scholarships, according to the executive director, Michael Brooks."

An esports tournament

Those lucky students who qualify for these video game scholarships earn money towards tuition by joining an esports team at their prospective school. For example, at Robert Morris University Illinois, there are currently 80 students on the esports team, 70 of which are receiving some scholarship money. At the University of California Irvine, there are 23 students on esports scholarships, and the team is only expected to grow in coming years. Brooks says that he expects esports to grow at an extremely rapid pace, "Certainly within five years I hope to see varsity esports be a common sight on college campuses across North America."

Other scholarships available for video game fanatics focus more on the intention to study game design in college. For example, NYU offers $24,000 in partnership with the Evo gaming tournament to a student, "who best demonstrates an active participation in the fighting game community, an interest in game design with a focus on innovating in the field of competitive games, and a legitimate financial need."

So how do you go about receiving an esports scholarship? Brooks told

Forbes that students earn esports scholarships just as they would earn a more traditional sports scholarship, "based off of three characteristics; academics, merit, and athletic. Our member institutions award esports scholarships (which we would relate to athletic scholarships) based off a number of different traits including; player skill, academics, ability to communicate, available positions open on the team, etc." So next time you start to tell off your child for playing too many video games, consider the possibility that they may just be helping pay their college tuition.

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So, I'm new to the "living on my own" game and let me tell you — it's been a pretty big struggle. I really never understood how much the little things cost until I moved out a couple years ago. That being said, I will take free things whenever I can get them.

Maybe you're already established and comfortable in your life — good for you! However, it's still useful to ask for things that you would otherwise have to buy for Christmas. Hey — I didn't want to be an adult either, but that's just the way things are.

Whether you're a young adult or a fully fledged old person, here are five major categories of presents you should definitely include on your wish list.

1. Kitchen supplies

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Not only are quality pots and pans super expensive, but the little things count too — cutlery, appliances and tools all add up. Putting big items like a food processor or a slow cooker on your wish list takes the hassle and anxiety out of buying one for yourself.

Not to mention, kitchen supplies will last you pretty long — unlike that bottle of brandy you and your cousins killed in one night.

2. Music or movie and TV subscriptions

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Music, movies and television are all consumed by subscription nowadays — I couldn't live without my Spotify, Netflix and HBO GO. Asking for a year's — or a couple years' if it's cheap — subscription to an online streaming service will save you a ton of money.

Let's face it — we can't keep mooching off of our family's accounts or creating new identities for free trials. So ask for a Netflix subscription instead of expensive headphones you can get super cheap knockoffs of.

3. Warm clothing

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Yet another unexpected expense in adult living — warm coats are expensive but absolutely needed for the northeast weather. Asking for a nice wool pea coat or a faux fur lined trencoat will ensure that you'll be toasty warm for years to come.

Heck, why not even socks? Being the butt of so many Christmas jokes, it's time that warm, fuzzy socks made its comeback. Both your feet and your bank account will thank you.

4. Gym Membership

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Ah yes, time for the dreaded New Year's resolution — instead of wasting your own money on a gym membership you'll only use two weeks into the year, why not ask for one instead? This way, maybe you'll even feel guilty for not going and continue your doomed resolution.

Memberships are also usually on sale this time of the year — praying on the weak, no doubt. But who knows? Maybe you'll actually stick it out this year.

5. Money towards an investment

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Do you have student loans creeping up behind you? Need to pay the rent to your swanky Brooklyn apartment soon? Why not ask for straight-up money for Christmas? Yes, it seems like a pretty shallow thing to do, but the holidays are for giving!

For my birthday, I asked my parents to pay that month's rent so I would be worry-free and spent my money on other things I had been putting off. It's not the most heartfelt present, but to me, paying off someone's debt is pretty huge.

Of course, this list is definitely for families that are well-off or at least lower middle class. If your family and friends can't afford these things, don't be distraught if they buy you a cheap present or none at all. It's important to keep in mind that the season is about coming together — while gifts are just an add-on.

College is a pretty stressful time — different from high school, but still hard to deal with. They're basically your first steps to living by yourself. From being tempted to order in every night and textbooks that cost way more than they should, college can also be a money blackhole.

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