Richmond financial expert offers college money saving advice - NBC12 - Richmond, VA News

Richmond financial expert offers college money saving advice

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RICHMOND, VA (WWBT) -

Doug Alexander makes a career of helping others reach their financial goals.

He says when it comes to saving for college, the biggest mistake is not having a plan.

"When you have young kids that are three, four, five year olds, the mentality is, we've got time. Next thing you know, they're in college," said Alexander.

He suggests considering what's called a 529 Plan - something he and his wife have invested in to help their grandsons in the future.

"When they got a social security number, we set up a 529 for their benefit, and we're just putting in 50 to 100 dollars a month and we figure after 18 years, watching it, and not letting it just sit there, but watching it grow over the number of years before they go to college, we'll give them probably some money to use towards tuition or books," said Alexander.

Another mistake? Giving financial gifts.

It is OK to give money to a loved one heading off to college, but watch how much you give.

"A problem that could be a tax liability is gifting more than the limits, then there could be a tax issue," said Alexander.

He says do not give any more than $14,000. Then, you don't have to worry about a gift tax.

However, if you'd like to give more, write a check directly to the college where your loved one will attend.

The third mistake some people make when it comes to saving money for their college students- not paying on their own student loans.

The money you think you have to help someone go to school may not be there if you don't take care of your own debt.

"The government is now starting to look at withholding social security if they owe the government student loans. So you have to pay it back, and just do it a little bit at a time," said Alexander.

Click here for more college money saving advice from Doug Alexander.

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