QUESTION:

Should I save for my child’s education if someone else (such as grandparents) told me they plan to cover the cost?

Short answer:

Yes. Save and save on a regular basis.

Long answer:

Regardless of someone else generously volunteering to pay for your child’s education from cash flow, savings, 529, gift through future inheritance, or some other method, you should independently save on an ongoing basis.

A personal savings plan removes ambiguity – as the owner, you clearly define the goal and develop the plan. Furthermore, you may directly monitor and review progress, and adjust the strategy whenever appropriate.

Ownership also dictates access to assets – the owner of the account can withdraw money directly. This brings up an important point regarding nonpersonal education savings:

Unless money is given to you directly (and immediately), there stands an underlying risk the funds could be reallocated and/or spent elsewhere.

Even in the case of a 529 Education Savings Plan with your child as the named beneficiary, the owner of the account retains the right to access assets and change the beneficiary AT ANY TIME.

In most cases, someone who loves your child enough to save for his or her future education would not intentionally act maliciously. Rather, life and circumstances change, and needs and plans follow suit.

At the end of the day, regularly saving for your child’s education provides CONTROL, INDEPENDENCE, and PROTECTION. Remain focused and personally committed to your goal and your future.