Arizona Families Can Turn ‘Disappearing Expenses’ into Educational Savings
- Marlen Uribe
- Apr 30
- 3 min read

By Hon. Kimberly Yee
Treasurer of Arizona
AZ529 Plan Administrator
It’s never too early, or too late, to focus on future educational expenses and start an education savings plan for the young ones in your life. Arizona families deserve the opportunity to access higher education without going into debt.
One way to set aside those funds is with Arizona’s Education Savings Plan, a state-sponsored 529 plan designed to provide families an opportunity to save for their child's future educational expenses in a tax-advantaged manner with eligible tax deductions per year for contributions made to an account. Accounts can be opened for as little as $15 a month, and plans grow tax-free.
Families can find ways to leverage extra funds to transfer over to savings by finding the “disappearing expenses.” These expenses are budgeted items for a baby or toddler that they begin to grow out of such as diapers, wipes, formula and childcare costs, which decrease over time.
Disappearing expenses
Baby and toddler costs — from diapers to daycare — can really add up for young families. As children grow, these costs begin to decrease, potentially allowing families to shift these “disappearing” financial obligations into an AZ529 Education Savings Plan and start saving on the other end of their child’s future — their higher education costs.
How spending shifts add up
Did you know that Arizona families spend, on average:
Between $840 and $960 a year on diapers. If diaper expenses are eliminated in two years, families can put away those diaper savings from ages 2 to 18, which would result in approximately $15,000 in savings, without interest, with money ready to be used after high school.
Nearly $2,000 per year on baby formula. Putting formula money into an AZ529 account beginning at age one yields an even larger return — more than $34,000 by the time a child reaches age 18.
Nearly $5,000 to $17,000 per year on daycare or preschool. When your child starts kindergarten, move former daycare or preschool expenses towards an AZ529 starting at age 5. By age 18, your child would have a whopping $65,000 in savings, not including interest, to spend on higher education.
Maximizing these disappearing childhood expenses and moving them into a child’s future higher education savings is a gift that will grow over time. As families look at what they are budgeting for the early childhood years, consider how these expenses decrease as the children continue to grow. Transferring over what used to be baby expenses to the savings side of the family budget prepares the pathway for a child’s future educational needs to achieve their dreams.
AZ529 Education Savings Plan facts
What is the AZ529 Education Savings Plan? The AZ529 Plan is a tax-advantaged investment plan designed to help families save. Savings in an AZ529 plan are free from federal income tax, and withdrawals remain tax-free when used for qualified education expenses. Contributions to an AZ529 Plan can be deducted from your Arizona state income taxes of up to $4,000 per beneficiary for a married couple filing jointly or up to $2,000 per beneficiary for single filers. There’s no limit on the number of beneficiaries for your tax deductions.
How can the funds be used? AZ529 savings can be used to pay for a variety of higher education expenses, including tuition, fees, and even internet access. AZ529 funds may be used at accredited public and private colleges, universities, community colleges, technical training schools and apprenticeship programs in any state. Additionally, AZ529 savings can even be used on school tuition for private and religious K-12 educational institutions.
What if the child doesn’t go to college or use all their 529 money? There is good news! Families now have the option of transferring qualified “leftover” 529 funds, up to $35,000, into the account beneficiary’s Roth IRA retirement funds, free of any tax, penalty or applicable income limits.
Who can participate? Anyone can contribute to an AZ529 Account. Parents can save for their children. Grandparents can save for their grandchildren. Aunts and uncles can save for their nieces and nephews. Friends can save for their friends. You can even open your own AZ529 Plan and save for yourself!
Now is the time to reflect and evaluate your financial goals, and invest in your loved one’s future education. The smart financial decisions made now will build a legacy for your family and secure the financial freedom they deserve.
It's fantastic to see such a detailed approach to helping families save for their children's futures! Leveraging those disappearing expenses is a clever way to set up an AZ529 Education Savings Plan. Just like in Bitlife , where making smart decisions can lead to a successful life, managing finances early on can truly pay off later, especially when it comes to education.
Renting a room on Harley Street provided a comfortable and convenient experience. The apartment was modern, clean, and https://harleystreetpremierconsultingrooms.co.uk/ located in a prestigious area. The host was responsive and ensured a pleasant stay.
Geometry Arrow streamlines gameplay by focusing exclusively on the beloved Wave mode from Geometry Dash. Players take control of an arrow icon and navigate it through a series of increasingly difficult obstacles, all while maintaining precise timing and sharp reflexes.
Thinking about education savings plans! Has anyone else used an AZ529? I did for my daughter's college fund, and the tax benefits were a real boost. It definitely helped ease the financial burden later on. Did you know Pacman 30th Anniversary was celebrated in 2010?