Newsroom - Money Saving Tips for Kids - Part 2 - Trademark FCU
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Newsroom – Money Saving Tips for Kids – Part 2

Newsroom – Money Saving Tips for Kids – Part 2

Money Savings Tips for Kids

As a grandmother of four granddaughters, ages 3, twins 2 1/2 and 6 months, I understand the challenges as grandparents we face when trying to think of things to give to our grandkids that have everything that they can possibly want or need. So I decided to save money for their future education and educate them on being financially responsible. I am writing to share the tips that I have done and also explain how Trademark FCU is currently helping us achieve our goals.


  • Start out by opening a Trademark savings account for your grandchild. Once you have that established, you can have one of our MSRs help you open up an ESA.
  • A Coverdell Education Savings Account (ESA) is an account created as an incentive to help parents and students save for education expenses.Judy__s_Money_Saving_Tips_Pic
  • Loose change- All the loose change in our house goes into the girl’s education savings accounts.
  • Birthday/gift money- Instead of buying my granddaughters another toy for their birthday or any other holiday. I make their gift a deposit for their future. I put their gifts into their Trademark FCU account.

Here are some things to remember about Coverdell Accounts:

  • Distributions are tax-free as long as they are used for qualified education expenses, such as tuition and fees, required books, supplies and equipment and qualified expenses for room and board.
  • Covered Expenses – Qualified higher education expenses and qualified elementary and secondary school expenses are covered. Expenses may include:

– Tuition, fees, books, required supplies and equipment
– Room and board
– Academic tutoring
– Uniforms
– Transportation
– Supplementary items (including extended day programs)
– Certain expenses associated with special needs beneficiaries

  • Any earnings withdrawn that are not used for qualified education expenses are subject to federal income tax and may be subject to a 10% additional federal tax as well as state and local income taxes.
  • There is no tax on distributions if they are for enrollment or attendance at an eligible educational institution. This includes any public, private or religious school that provides elementary or secondary education as determined under state law. Eligible institutions also include any college, university, vocational school or other post-secondary educational institution eligible to participate in a student aid program administered by the Department of Education. Virtually all accredited public, nonprofit, and proprietary (privately owned profit-making) post-secondary institutions are eligible.
  • The Hope and lifetime learning credits can be claimed in the same year the beneficiary takes a tax-free distribution from a Coverdell ESA, as long as the same expenses are not used for both benefits.
  • If the distribution exceeds qualified education expenses, a portion will be taxable to the beneficiary and will usually be subject to an additional 10% tax. Exceptions to the additional 10% tax include the death or disability of the beneficiary or if the beneficiary receives a qualified scholarship.

I hope these tips will help start your own saving strategies for your grandchildren. Remember, despite whatever you are able to save; one of the best gifts you can give your grandchildren is to start on their future education.