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Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions.
This week’s episode starts with a discussion with Liz Weston about her column “How to Complain and Get Results.”
Then let’s pivot to this week’s money question from Katie, who sent us an email: “I want to start saving for my son. I’m considering an education savings account, but worry if he doesn’t choose a penalized college. What advice do you have about setting your kids up for financial success and independence (if you don’t have a ton of money to put away)?”
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All we have to do is complain 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 on hand.
Companies have several ways for consumers to submit complaints, including through social media, by phone or with a chatbot. Choose the communication method that suits you and the nature of your complaint. Liz also offers suggestions for dealing with customer service representatives. If you eventually do get in touch with one, clearly explain the problem and how you want to solve it, and be kind. It may help you get what you want.
Our take on saving for college
Parents have a menu of options to help them save for their children’s education. In addition, these savings vehicles are not exclusive, so if you want, you can open several accounts that can be tapped to pay for educational expenses.
One of the most popular education savings accounts is the 529 plan. Withdrawals are tax-free when used for eligible expenses, and there is some flexibility in how the funds are spent. If your child does not attend a four-year college or university, the money in the 529 plan can be used to pay for vocational school or for the education of another family member.
Parents can also put the money into a high-yield savings account, CD or savings bond. If you open a CD or bond, familiarize yourself with the early withdrawal penalties. A Roth IRA is an option for parents of children with income. Its name indicates that it is a retirement account, which it is, but the income of the Roth IRA can be used to pay for qualified education expenses. Additionally, earnings can be withdrawn without tax penalty.
- 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 this a learning opportunity: Talk to your child about how you save and why it’s important.
- Be flexible: Explore your options for early withdrawal or beneficiary changes if your circumstances change.
Got a money question? Text or call us at 901-730-6373. Or you can email us at [email protected]. To hear past episodes, go to podcast homepage.