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Gentle way to let grandparents know about college fund?
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Anonymous
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We set up a 529 college savings plan for our three-year-old son a couple of years ago. We used to contribute to it monthly but have not for a bit now due to being on one income for the time being. (We also have a child who will be born in late November and will set up the same plan for him/her.)
Meanwhile, my son has four sets of grandparents - at least of couple of whom are pretty money/savings conscious and who, of course, always provide gifts for birthdays and Christmas. We are a little surprised that none of them (especially the ones big on savings and paying for college) have inquired about any such type of plan, but they've haven't to date. Maybe it just hasn't crossed their mind. So, my question is: What is a tactful way to let the grandparents know that these accounts exist and that we would welcome contributions when they are thinking about birthday/Christmas gifts? |
Anonymous
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I'm not sure there is a tactful way. Maybe it hasn't occurred to them because they see savings plans for college as your responsibility. Also, it depends on what kind of gift givers they are. I have a friend that likes to contribute to savings so when my daughter's birthday came around he asked me about it. Others like to give gifts because they love to see the joy the gifts bring the children. Not sure how you could not offend the second type by asking for a specific gift. I would say if they want to, they will ask you.
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Anonymous
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Are you talking about having them contribute the same amount in lieu of what they would normally spend on presents? If so, maybe you could pull it off as long as you are really clear on this point.
But if you are looking for substantial contributions, you are putting your hand out, and that kind of thing rarely goes well. It would be better to mention something like that if some of the grandparents start talking about estate planning with you. |
Anonymous
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OP here. Perhaps for more clarification - what DH and I are wondering is would it be appropriate/okay to just mention to them at some point, "Hey, FYI, we have these accounts set up if you are ever interested in contributing..." (as part of a birthday/Christmas present, or whenever) And then leave it at that. And is there some sort of good way to do this? (And maybe the answer is no, there isn't because it's not appropriate, which is why I'm asking.)
We aren't thinking of asking for any specific amount - but we just thought that maybe if they knew about it they might be interested in throwing in $25 or $50 or $75 or $100 or whatever a year. Or, not a problem if they aren't interested at all. Point being, no pressure but we wondered if they might be interested in knowing it's there as a option. |
Anonymous
| Why not just mention at some point that you have the accounts? It really needs to be their decision to contribute, and I'm sure if they are money or savings conscious, they already know it's an option. |
Anonymous
| Really? You need advice about this? What kind of strange relationship do you have with your parents where you can't just mention during a random phone conversation - "oh did I ever tell you we set up college funds for the kids? We are putting some money in there on birthdays and holidays and scaling a bit back on gifts since our dc have so much stuff already." or when it comes time for xmas/bdays just throw it out there. What's the big deal? Why would you need etiquette tips about how to talk to your PARENTS? |
Anonymous
apparently someone has missed her etiquette classes..... 
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Anonymous
| OP, maybe one way to broach the topic is to let your parent know that if they give their normal gifts directly to the 529 accounts, the gifts might be tax deductible. I'm not 100% positive about this, but I think that's correct if your parents are in the 529 account state. Alternatively, you could offer to set up separate 529 accounts in your parents' home states, so their regular xmas gifts could be tax deductible. Maybe by asking if they'd be interested, that will spark their interest. |
Anonymous
I totally agree. These are not distant relative or casual acquaintances so what is the big deal? Everyone in my family knows I have a no-gifts policy. I give cash because we all have too much useless junk. |
Anonymous
Yeah, I wouldn't have put it as bluntly as this, but this is the type of thing just normally comes up in conversation with our parents. We talk about different investments pretty often, not just those involving college savings. OP, maybe they are of the mindset that parents/grandparents don't save/pay for college, and the kids are expected to do it on their own. Or maybe they think that when they die, your inheritance will be enough, and that's their intention in the first place. |
Anonymous
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I'm guessing that maybe OP comes from a family that doesn't talk about money. My parents taught me how to budget and save, but never used themselves or their income, investments, financial choices as an example. When I got engaged, they asked what I thought my wedding budget was, when I told them they only said "wow, that's a lot of money" (fwiw, actually way less than the nationwide average for a wedding), but never said they wanted to pay for it/help/contribute/etc... Three months later after my fiance and I had been planning and paying for things ourselves, with no fanfare they handed us a check for a particular amount.
So, if OP's parents are like mine, I can see where openly bringing up money isn't easy. If families are the type that go over the top spoiling their grandchild with either material gifts or gifts plus cash, I can see using some of the previously mentioned suggestions to make them aware that you have a college fund if they wanted to put the cash part of the gifts straight there, or let them know that's what you are doing with it and then they can take it from there. |
Anonymous
Really? You needed to say this? I think you are the one that needs to go to charm school. |
Anonymous
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"What would Alastair like for Christmas this year.?"
"Well, he's really into firetrucks and dinosaurs, so maybe some basic nonfiction books about them. And we've opened college savings accounts for both kids -- if you're interested in contributing a little something to their nest eggs, we can give you the info. You can even do it online; it's as easy and secure as buying something on Amazon." |
Anonymous
| Isn't it also true that having it in a grandparent's name is better when applying for financial aid (with the cost of college these days - I think most parents do try to at least get some aid and it isn't embarrassing to admit)? Meaning if the people determining if my husband and I do get some aid the savings in the savings plan would factor into how much we are granted where as if it is in a grandparent name then that doesn't get reported/ looked into. I think saying to grandparents if we pay you $50.00 a month with the agreement that you put it into this savings plan for our child (your grandchild) that is more than understandable. Plus they would get the tax benefit. If you are lucky and if your parents/ in-laws can do it they might say "oh we will take care of this as a gift to the little one" or even "sure we will do that and add an additional $25.00". Even if they just agree to accepting your money and setting it up in their name that is helpful in itself. I of course am a big talker - my DH and I have been talking about this for three years and have yet to set it up for our 3 year old. I am having number two in a few weeks and this is on my maternity leave to do list. |
Anonymous
It isn't necessarily better to have the accound in a grandparent's name - see here for reasons: http://www.savingforcollege.com/bankrate_articles/article.php?article_id=80 |