- 1). Determine which State's 529 savings plan you are going to use. Every state has its own 529 savings plan. I would suggest going with your own state's 529 savings plan so that contributions made to the plan can be deducted from state taxes.
- 2). You can open the 529 savings plan yourself or through a financial adviser. The minimum amount to open a 529 savings plan is only $25.00. Most brokers will charge a commission to have your 529 savings plan through them. If you are investment savvy then open the account yourself.
- 3). Choose a beneficiary. You need to choose a beneficiary for your 529 savings plan. This can be your child, niece, nephew, or anyone that you have legal guardianship over.
- 4). You can sign up for automatic deposits to be made directly to your 529 savings plan. The money can be taken from your bank account every month and placed in your 529 savings plan.
- 5). If you make deductions, make sure to use the money to pay for college expenses. If you use the money for something else, you can be taxed on that money up to 10%.
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