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Welcome to NerdWallet’s Smart Money Podcast, where we answer your real money questions.
This week’s episode begins with a discussion with Liz Weston about her “How to Complain and Get Results” column.
Then we move on to this week’s money question from Katie, who emailed us: “I want to start saving for my young son. I’ve considered a college savings account, but I’m worried if he doesn’t choose college there will be a penalty. What tips do you have for preparing your children for financial success and independence (when you don’t have a lot of money to invest)? »
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Our way of complaining to get results
Smart Money co-host and NerdWallet columnist Liz Weston recently wrote about how to complain to customer service and get results. First, Liz recommends preparing yourself mentally and physically for the interaction. Accept that dealing with customer service can be frustrating and time-consuming, and collect relevant information such as confirmation numbers and warranty information to have on hand.
Companies have multiple ways for consumers to file complaints, including through social media, over the phone, or with a chatbot. Choose the mode of communication that suits you and the nature of your complaint. Liz also offers suggestions for dealing with customer service representatives. When you do contact one, clearly explain the problem and how you’d like it resolved, and be nice. It might help you get what you want.
Our perspective on saving for college
Parents have a menu of options that can help them save for their child’s education. Additionally, these savings vehicles are not mutually exclusive, so if you wish, you can open multiple accounts that can be leveraged to pay education costs.
One of the most popular education savings accounts is the 529 blueprint. Withdrawals are tax-free when used for qualifying expenses, and there is some flexibility in how the funds can be spent. If your child is not attending a four-year college or university, money from the 529 plan can be used to pay for vocational school or tuition for another family member.
Parents can also deposit money into a High Yield Savings Account, Savings CD or voucher. If you are opening a CD or a bond, familiarize yourself with the penalties for early withdrawals. A Roth IRA is another option for parents of children with earned income. Its name indicates that it is a retirement account, which it is, but earnings from the Roth IRA can be used to pay eligible educational expenses. Moreover, this income can be withdrawn without incurring a tax penalty.
Our advices
- Know your options: Choose an account to use for savings, such as a 529 savings account or Roth IRA, and try to put money into it regularly.
- Make it a learning opportunity: Explain to your child how you save and why it is important.
- Being flexible: Research your options for early withdrawals or beneficiary changes if your circumstances change.
Do you have a question of money? Text or call us at 901-730-6373. Or you can email us at [email protected]. To listen to previous episodes, go to podcast homepage.