Whether you are outside to enjoy the heat or inside to avoid the humidity, Summer 2024 is the perfect time to level up your higher education savings with Ohio’s 529 Plan, CollegeAdvantage. If you would like some saving suggestions, here are some ideas and steps you can take this summer to fund your Ohio 529 account.
Save with Ohio’s 10-Day Sales Tax Holiday!
The State of Ohio has extended its traditional sales tax holiday weekend to last for 10 days! Ohio’s 2024 sales tax holiday began at midnight on Tuesday, July 30, and ends at 11:59 p.m. Sunday, Aug. 8. Previously, items included in the sales tax holiday were school supplies, school instructions materials, and clothes. Now, families can make tax-free purchases for many things up to $500 except for some specific items as outlined the Ohio Department of Taxation.
This extended time allows you to shop for the best prices for items on your child’s school supply list with back-to-school sales as well as not being taxed on those items! You can also buy their new school clothes and many other things tax-free. You can then deposit these savings into your child’s tax-free 529 plan to continue saving for their future education and career training.
The sales tax holiday is also a great “money moment” to teach your children about delayed gratification, a valuable life skill. If you give your children a certain amount to buy their own school supplies, then this can be a lesson on how to stretch their dollars. Look for the current price of items for the upcoming school year. Next, figure out the sales tax—Ohio’s sales tax rate is 5.75%—for these items. Then you can look to see if the stores will discount these items’ prices during the sales tax holiday. Explain to your child that if they wait, they can potentially save more money with lower prices and no sales tax. Together, you can figure out how much those savings would be so your child can see the real financial benefit of waiting for the right time to make a purchase. You can also talk about saving these extra funds in their Ohio 529 account. Add a little extra encouragement to save by matching the contribution they make to their future education.
Save with disappearing expenses
After you take advantage of Ohio’s sales tax holiday, there are more ideas to build the savings in your Ohio 529 account, including disappearing expenses.
Disappearing expenses are those costs that are temporarily part of your family’s budget. For instance, a huge disappearing expense is preschool costs. Once your child starts all-day kindergarten or first grade, you can turn the former preschool, day care, or summer camp costs into regular contributions to your 529 account. This way, you can continue to support your child’s educational needs into the future. Other disappearing expenses for a baby or toddler are formula and diapers. Once your child outgrows the need for those these, direct some of those dollars to your Ohio 529 account.
Disappearing expenses can also include car loans, medical or dental bills, credit card debt, or more relevantly, your own student loan payments. Once you have paid off these debts, re-direct these dollars from your budget to your child’s 529 plan. As these costs are already in your household budget, there is no change in income when you turn this expense into an Ohio 529 contribution.
Save with automatic contributions
Another simple and easy way to build up your 529 savings is with automatic recurring contributions. You can pay for your child’s future higher education first, instead of contributing whatever is left in your paycheck. You can set these automated deposits according to your paydays or a monthly contribution schedule. Even small contributions to your 529 account can add up to valuable savings.
Some employers also offer payroll direct deposit, where a portion of your after-tax pay goes directly into your Ohio Direct 529 account. To learn more about establishing direct deposit, this article will guide you through the simple steps to take. Payroll contributions make it easier to meet your college-saving goals.
Save with Upromise
Upromise* helps you save for your child’s higher education costs while shopping. Upromise is a free rewards program that offers its members cash back as you shop online, dine out, buy groceries, and book flights and hotels. If you sign up with Upromise now, you can receive a $5.29 bonus. Additionally, you can earn another $25 in bonus rewards when you link your account with Ohio Direct 529 Plan. Once you reach $50 in your Upromise account, you can transfer those funds to your Ohio CollegeAdvantage Direct 529 account.
To see how Upromise can help build your Ohio 529 college savings account, a long-time CollegeAdvantage family shared their Success Story on how Upromise added to their son’s Ohio 529 account.
Save with loved ones’ contributions
Family and friends want to celebrate the big events in your child’s life. If they ask for gift ideas, share that they can help with another big milestone in your child’s life—their future education—with a contribution to their 529 account. With Ugift, it’s simple for anyone to contribute to your CollegeAdvantage Direct 529 Plan account. To get a Ugift code to share with your loved ones, log in to your Ohio 529 account and click on Ugift. This code allows others to make online contributions to your 529 without needing the account number. With the Ugift code, friends and family can visit Ugift529.com to make their electronic contribution from their bank account. The gift giver can make one-time or recurring contributions at any time. And if they are an Ohio resident, they can deduct contributions up to $4,000 from their state taxable income.
It's never too late to start saving
If you haven’t started to save for college, it’s never too late to open an Ohio 529 Plan. Every dollar saved is a dollar that doesn’t have to be borrowed. This makes a 529 college savings plan an excellent alternative to student loan debt. Even small 529 plan deposits can grow through the power of compound interest and tax-free earning, with tax-free withdrawals for qualified higher education expenses. If you have been saving with Ohio’s 529 Plan, take these additional steps and watch how your account grows!
To set goals for how much to set aside in Ohio’s 529 Plan for your child’s future education, our online tools can help to start to shape your college and career training savings plan.
Ohio’s tax-free 529 Plan can be used nationwide for whatever comes after high school, including apprenticeships, trade and vocational schools, community colleges, certificate programs, four-year universities and colleges, graduate school, law school, and medical school. A 529 account can be used for whatever education comes after high school for your child. Learn, plan, and start with Ohio’s 529 Plan today at CollegeAdvantage.com.
This article was originally posted in July 2020 and has been updated to reflect new information for 2024.
* Upromise is an optional program offered by Upromise, LLC, is separate from the Ohio's 529 Plan, CollegeAdvantage, and is not affiliated with the Ohio's 529 Plan. Separate terms and conditions apply to the Upromise program, and you will be required to read and agree to them at sign-up. Participating companies, contribution levels, and terms and conditions are subject to change at any time without notice. Transfers from Upromise to an Ohio's 529 Plan, CollegeAdvantage account are subject to a $50 minimum.
Upromise and the Upromise logo are registered service marks of Upromise, LLC.
