Yee: Help children be savers, not spenders, on National Savings Day
AZ529 is a state-sponsored education savings plan where earnings grow tax-free
Photo by Christopher Barr
Arizona State Treasurer Kimberly Yee
Posted
About AZ529
AZ529, Arizona's Education Savings Plan, is a state-sponsored program where earnings grow tax-free. Those who invest in an AZ529 Plan can receive a deduction up to $2,000 per beneficiary for individual tax filers and up to $4,000 per beneficiary for married tax filers who file a joint return. Qualified educational expenses include tuition and fees, books, computers, and room and board. Friends and family members may add to a child’s AZ529 account at any time through gifting and earn the same tax benefits. As of Jan. 1, 2024, any remaining AZ529 funds can be transferred into an individual IRA account for retirement savings for the same beneficiary. Learn more at www.az529.gov.
By Honorable Kimberly Yee | Arizona State Treasurer
National reports indicate your child’s saving and spending habits are established at an early age. In honor of National Savings Day, Oct. 12, and as chair of the state’s first-ever Financial Literacy Task Force, I’m encouraging Arizonans to prioritize financial education within their families.
Here are seven practical tips to help parents and caregivers teach children how to save and realize goals for the future instead of focusing on what they think they need now:
Walk the talk: Talk with your children about what you are saving for and what sacrifices you make for retirement, vacations, their college, etc. and demonstrate that — take them with you to the bank when you make a deposit or show them how you do it on your phone or laptop for online banking.
Match it: Reward good savings habits by matching savings and further encouraging kids to delay gratification by saving for what they really want.
Make it fun: Turn conversations about saving and college into games and crafts to keep it hands-on. Painting your own piggy bank would be the perfect time to talk about dream jobs and how to prepare and save to get there.
Jump start college/career savings: Give children a boost with saving for their future education by setting-up a tax-deductible AZ529 Education Savings Plan. Contributions from parents, grandparents, relatives and family friends provide a jump-start for their littlest loved ones and inspires them to contribute as well.
Hands-on saving: Provide an allowance with rules attached for saving and spending, but make sure they earn the allowance — don’t just give them money for no reason.
Let them fail: Allowing kids/teens to make a few minor financial failures when they are young can help them avoid major failures as they become adults. Missing a phone payment and losing their phone for a week would be something a teen won’t soon forget.
Celebrate success: Track results and share progress with your child to help motivate them in their studies and savings and know your expectations for their future. Make a chart and when they reach a milestone, find a way to celebrate that doesn’t involve spending time together instead of money.
Visit www.az529.gov for more tips to save and help children begin realizing their career and college dreams in honor of National Savings Day. Remember, it is never too early or too late to start saving for college and career goals.
Editor’s note: State Treasurer Kimberly Yeeis administrator of the AZ529 Education Savings Plan. Reader reactions, pro or con, are welcomed at AzOpinions@iniusa.org.
