When you buy a car you want to know the list price. It’s the same with a home purchase. But when parents shop for a 529 college savings plan, they rarely think about what it’s going to cost them.
That’s a shame because when you’re investing for this big-ticket item for your children, costs are just as important. Here’s why:
You can’t control what kind of investment returns your 529 plan will generate. Nobody, after all, knows ahead of time how the stock and bond markets will behave. You can, however, control your costs by choosing an inexpensive 529 plan. Most parents don’t understand that a 529 plan’s cost is going to be the most important factor in whether the investments do well over time.