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College education is the second-largest investment an average individual makes throughout their life. The first one is buying a home. Although you can hope on scholarships, grants and loans to cover part of the cost, you’re still aware of the fact that you should save money if you want your kid to go to college. As any other smart parent, you started doing that a long time ago.
Have you ever withdrawn money from that college account for a purpose that wasn’t related to your kid’s education? T. Rowe Price surveyed 1,086 parents of children aged 8 to 14. 45% of them have taken money from their kids’ college savings in the past two years. Only 18% of them used that money to pay for their kids’ education. Where does the money go? Healthcare costs, pay off debt, taxes, child care, car repairs, weddings… the reasons are many. It’s devastating to see that some people are using this money for holidays, vacations, and day-to-day expenses.
Sure, we promise we’ll put that money back in the savings account ASAP. We feel guilty knowing that, in a way, we’re stealing from our kids. Still, we keep taking money and we rarely repay them back.
What are we doing wrong? Is there any other solution to cover a gap in the family budget? Let’s explore 5 alternatives to raiding our kids’ 529 college savings accounts.
1. Become a Freelancer
If you need money fast, you can earn it online. Do you have skills in writing, translation, graphic design, photography, or anything else that’s valued in the freelancing world? Maybe you can even start a blog or online business and make it successful. With those options, you’ll have to be a bit more patient because the money will start coming later, but they are certainly worth considering. Freelancing, however, can quickly fill in the gap in your budget, if it’s not too big.
The good thing about freelancing is that you can do it as a part-time job. You’ll keep your current job, but you’ll invest a few hours in the evening to make more money.
2. Take a Staycation instead of a Vacation
It’s devastating to see how many parents are taking money from their kids’ 529 account just to go on a vacation. Yes, Cabo seems lovely. If you want to go there, then save money in another account. Do not take a vacation on the account of your kid’s future. Cabo will be right where it is next year.
For now, you can take a humble vacation that doesn’t force you to raid your kid’s money. Maybe you won’t be able to go anywhere at all. That’s okay. You’ll rest at home and you’ll feel good about it, knowing that you’ve done something very important for your child’s future.
3. Invest Instead of Withdrawal
When you’re devastated for not being able to build up on your kid’s college account, you can find an alternative: invite other people to become part of the savings journey. Gift of College is an online service that makes that possible. All you need to do is tell people about the 529 savings account. If they are about to buy a gift for your kid’s birthday, you can ask them to invest that money in the account instead.
Focus on this platform! With enough promotion, you’ll reach an audience larger than friends and family. Many people are willing to give the gift of education to kids whose parents don’t have enough money. When you’re so committed to this goal, it will be impossible for you to raid that account.
4. Sell Something on eBay
If you need an immediate cash injection, look around. Before you think of the college savings account as the last resort, think of everything you can quickly sell to make some money. Do you have valuable jewelry, extra smartphones, a tablet, or a laptop no one uses? Do you have books, collectible items, or musical instruments you could sell? Maybe some beautiful porcelain plates that could reach a high price? Selling the things that aren’t necessary for your family’s existence is a much better option than taking money from the college account.
If you, your partner or your kid are good in any arts and crafts, you can sell handmade things in your eBay store, too. When you see the potential of maintaining an online business, you can start purchasing wholesale items and selling them at a higher price. That’s a nice way to make some extra money on a long-term basis, so you won’t even think about touching the college account. In fact, you’ll be able to put more money on it.
5. Get a Loan
Do you have people who trust you? Are you sure that you’ll give that money back on time? Then, ask a friend or relative for a loan. Maybe you’ll have to swallow your pride, but that’s better than taking money from your kid and never giving it back. When you’re bound with a loan from another person, you’ll be much more responsible when it comes to returning it.
It’s time for us to become fully aware of the cost of college education. What if your kid doesn’t get a scholarship? What if they do get financial aid, but it’s not enough for all expenses related to college? Are we supposed to leave them with no education? Absolutely not. We are responsible for their future, and we do everything to help them succeed. There are alternatives to raiding the college account; we just need to consider the right ones.
Antonio Tooley is an ESL teacher and a blogger. He enjoys roaming around the world and exploring new cultures. When not doing that, he’s providing writing assistance to students at EduGeeksClub. He’ll be happy to meet you on Twitter.