First off, what is a 529 plan? Good question.  It’s a savings vehicle that allows you to set money aside that will grow tax-free for your child’s college, charter or private school education.  It can help pay for expenses from Kindergarten through college tax-free, including for things like computers!

Sounds pretty good, right? Where do you sign up?  Well, just read my step-by-step guide and you can get one up and running within ten minutes. Say bye-bye to any 529 confusion and say hello Super Parent!

Let me begin by giving you my disclaimer – I suggest you first have your own emergency funds and retirement savings in place. You can always get a loan for college but you can’t get one for your retirement. So with that said I am going to assume you have some savings set aside and that your next goal is to save for your kid’s education.

One of my favorite things about a 529 plan is that you remain in control of the money – not the child – unlike with a savings account, which becomes theirs after age 18, in most cases. You can also change the beneficiary to another child in instances where one scholarships out or ends up not going to a private school, charter or college.

Step 1 | Find an administrator. I recommend heading to Savingforcollege.com to find one that suits your needs. I like California and the New York plans for their low costs and easy online user interface.

Stop 2 | Fund the account. 529s are useless unless you put money inside of them. Arrange automatic deposits for a set it and forget it process. The maximum contribution per year is $15,000.

Step 3 | Choose your investment funds. The easiest way to choose a fund is to choose one that is more aggressive when the child is younger and then becomes more balanced and conservative as the child gets older. You can speak to your administrator to determine which one works best for you.

Step 4 | Pay for any educational expenses with the 529. When it comes time to use the money, you can withdraw funds and have it directly deposited into your bank account, as the owner.  Another option is to have the funds go directly to the beneficiary’s linked bank account.  Or you can send a check directly to the school. There’s lots of flexibility here but I recommend keeping a good record of all of your expenses.

In some states, you can even get a state tax deduction.  And now have the ability to use the funds to pay student loans off.

So, when birthdays and holidays roll around and you get asked, “What does little Ava want?” don’t be shy…tell them she could use a contribution to her 529 plan!  You can set up a special hyperlink for free to have them contribute directly to the 529 account with your plan administrator or at Ugift.com.  Don’t worry, they won’t have access to the account, it’s just where they can make deposits into it.

That’s it, parents, you did it!  Excellent work. Now, if you could just figure out how to magically get all the laundry done before dinner…