Spring has finally arrived in full force and we have been taking full advantage of the warmer weather. One of our favorite activities is going for walks with Frugal Boy and his nifty difty jogging stroller his Aunt gifted him.
You can imagine our sadness when the front tire went flat. Not to worry, patching an inter tube tire (the kind that most bicycles have) is a simple and cheap procedure.
There are only a couple of items needed to complete the repair.
A patch kit (can be found in almost any big box store or your local bicycle shop will have dozens of different brands and styles)
An air pump
A pinch of perseverance.
If you’ve never patched a tire before, just get on Youtube and search. There are dozens of step by step videos that explain it way better than I ever could.
After filling up the inter tube with air, I heard the tell tale hissing sound of a leak. Here it is all patched up.
Before you reassemble the wheel, make sure the inter tube holds pressure. I double checked and it turned out there was another puncture! All in all, patching a tire is a simple and cheap DIY project for all experience levels.
Great news! Frugal Boy’s social security card came in the mail today making him an official drone of the system. His future earnings will power my retirement. He doesn’t seem to like that concept much at the moment however.
A big advantage of having a SSN is that all sorts of financial doors are now open to him. He can now have a bank account to safely save money and even more importantly, he can now be listed as the beneficiary of a 529 college savings plan.
What is a 529 Plan?
SavingForCollege.com describes it as,
A 529 Plan is an education savings plan operated by a state or educational institution designed to help families set aside funds for future college costs. It is named after Section 529 of the Internal Revenue Code which created these types of savings plans in 1996.
My own simplified explanation is that a 529 savings plan works in much the same way as a Roth retirement account. You contribute post-tax money to the 529. That money then grows through increases in the stock market until the beneficiary of the account withdraws the money for educational expenses. If that was too confusing, think of it this way. A 529 is a legal loophole that the IRS created to encourage parents to save money for their kids future without the normal taxation that would be applied. The only condition that the IRS puts in place for not taxing the growth in the investments is that the money must be used towards education.
How do I setup a 529?
Start by finding who manages your state’s plan. Vanguard has put together a handy state map that will make this and comparison shopping easy. Each state offers a 529 plan. You do not have to use your state’s plan. For example, we live in Illinois, but we could enroll in the Nevada 529 plan. It also does not matter where the college is located. If you want your son or daughter to attend an Ivy League college, you do not have to use one of those state’s 529 plans.
We decided to use the Illinois 529 plan (Bright Start®; College Savings Program (Direct-sold)). We can deduct our contributions on our state taxes and the minimum amount to open an account is astonishingly low (only $25).
Bright Start advertises that it only takes 15 minutes to enroll. If Frugal Boy hadn’t been fussy, that might have been true. I did like the fact that you can setup a monthly contribution from your checking account. We started off with a small monthly contribution. It is money that we have saved by being frugal and cutting costs elsewhere in our lives. This is part of the reason why we lead a frugal lifestyle, so we can put money towards things that will make a meaningful impact. Even with a small monthly contribution, the amount set aside by the time Frugal Boy starts college will have grown substantially. Investing and savings favor the young.
Now that his 529 is set up, any gift money he receives will be put towards his education savings unless specified otherwise. Thank you all of those who gifted money to Frugal Boy. That money has been socked away for his noggin later in life!