Back to School Ways Students and Parents Can Be Financially Prepared

Our recent video dives into how students and parents can be proactive with finances for the school year and retirement. Learn budgeting tips, explore tax-advantaged accounts like Roth IRAs and ESAs, and get ready to crush your goals! To discover more ways students and parents can be financially prepared this school year, read our blog: https://www.madisontrust.com/back-to-...

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SCRIPT
In this video, you’ll learn how students and parents can be proactive and financially prepare for both the school year ahead, as well as retirement!

Sharpen Your Pencils & Pinpoint Your Budget

Like how students may sharpen their pencils before a test, its important investors sharpen their budgeting skills. Consider keeping track of your monthly income and expenses. Excel is a popular tool to utilize as it can aid in adding up your expenses. If spreadsheets aren’t your forte, downloading a user-friendly app may prove to be beneficial.

Another financial planning method is creating goals for you and your family. Ask your child questions like, “What kind of extracurricular activities would you like to add to your school year?” or “What are your upcoming school trips?” Their response can help gauge how much money you would need to set aside and how that coincides with your fiscal ambitions.

Open Your Textbook & Open a Retirement Account

Studying will likely become a quintessential activity for your child, and they’ll need to open their textbook. Similarly, opening a retirement account is considered crucial for retirement preparation. There are many tax-advantaged accounts students can acquire to grow their savings.

Self-Directed Roth IRA

In this account, the IRA owner’s funds grow tax-free. Your child can contribute their income earned from a summer job and can even invest their retirement savings in a variety of alternative assets. Family members can open a Self-Directed Roth IRA for your child and contribute on their behalf, if that amount doesn’t exceed the total income your child has earned.

Education Savings Account

The Education Savings Account (ESA) is also called the Coverdell Account. With similarities to the Self-Directed Roth IRA, earnings are tax-free, so long as it’s used for education and the amount of the distribution doesn’t exceed the beneficiary’s qualified education expenses. For more information, visit the IRS’s website.

The earlier you start saving, the more time your money and your child’s money can grow. Ready to start the school year and your retirement prepared? Call us today! Experience exceptional service for your exciting investment opportunities at Madison Trust. 

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