How To Ask Friends and Family for Money for a Child's College Savings Plan
May 12, 2011
When asking for money, identify the purpose of the gift. People feel more comfortable giving money when they know that the money will be used for a worthwhile purpose like paying for the child’s college education. Don’t discuss too many details, other than the projected cost of college and perhaps how much the parents have saved so far.
Do not ask for a specific amount of money, as it will make the giver feel guilty if they can’t afford to give that much. Asking for too much money may also be considered rude and may offend some people. If the giver asks you how much they should give, sidestep the question by saying that whatever they can contribute will be appreciated. If they insist on your naming a dollar figure, then it is ok to respond to their question with a range of reasonable figures. Don’t be greedy.
When asking for money, use only positive words. Self-deprecation conveys negative connotations with the request for a gift and may reduce your chances of getting a good gift. You may feel awkward, but don’t use language that assumes a “no” response. Keep it simple and straightforward. Be polite. After you ask, stop talking. Don’t try to compensate for your awkwardness with constant chatter. Give them a chance to respond. If they say no or maybe, don’t keep asking. They may already have bought a material gift or they may be unable to contribute. Thank them regardless of their answer.
You can reduce the awkwardness of asking for money by letting someone else do the asking on your behalf. This is more common at weddings than at baby showers or birthday parties, but it is much less awkward to have a friend or family member tell your guests about your gift preferences. It distances you from the ask.
Many 529 college savings plans offer gift certificates as an option, often dressing them up with a fancy personalized card or a gold envelope. Some will send email to your friends and family to ask for contributions on your behalf. You can also print contribution slips to send to relatives who don’t read email. For example, Upromise provides the Ugift program to help friends and family contribute to a child’s college savings plan. (According to Upromise Investments, the average gift is over $600, but contributions may be as low as $15. Other 529 plans, like the Private College 529 Plan, require a $25 minimum contribution.) There are no restrictions on who may contribute to a child’s 529 college savings plan account.
There are also several third party social networking college savings sites that will ask your friends and family for contributions on your behalf, but these sites all charge a fee for their services.
If someone is making the gift in person, it may be easier for them to just write a check with “college savings plan” written on the purpose line.
Some people feel more comfortable giving a US savings bond instead of cash or a check, since it is clearly designated for savings and the savings bond has a more formal appearance. A US savings bond can be held until maturity. Series EE and Series I bonds can also be rolled over into a 529 college savings plan tax-free in certain circumstances.