One of my favorite gurus of consumer and financial wisdom is Clark Howard, a true gentleman and genuine expert whose talkshow on saving money and avoiding scams has become quite popular. As part of his dedication to helping American consumers, he has done extensive research to prepare a free guide to the college savings plans (a.k.a. “529” plans) for college savings. After surveying the plans available through each of the 50 states, he ranked Utah at the top of the list of his page about college savings plans (“529” plans). Utah is one of three states with a “superb” plan. Nice honor!

People in other states that might not have a decent low-cost plan can enroll in the Utah college savings plan.

Here’s what Clark Howard said in introducing the results of his research:

I want you to know the best way to save for your son or daughter for college. But first remember my rule that you don’t save a penny for college unless you are already saving the maximum you can for your own retirement. College can be paid for with grants, loans, scholarships and work. Retirement happens only if you have saved the dough.

That said, after 75 hours of research I have finished my revision to one of our most popular features on clarkhoward.com, my college savings guide. While I was doing my revisions, Congress improved the college savings plan law (known as 529 plans) by making their tax-free status permanent. 529 plans allow you, a relative or a friend to put aside money for a child’s college education. The plans grow tax free and, under current law, are spent tax free on the child’s tuition, books and fees. If your child doesn’t need the money, it can be transferred to another family member and still be spent tax free. If the child does not go to college, you pay tax on your earnings plus a 10% penalty. When you open an account, your money is invested in a pool much like a mutual fund. I recommend that you look at the investment option in a plan known as the “age based portfolio.” This lets the plan adjust to a mix of investments as your child gets closer to college age.

However, Congress left the most confusing and silliest aspect of 529 plans in place. Plans must be sponsored by a state even though residents of most states can put their money in any state plan. And get this, a state can sponsor more than one 529 plan. One state sponsors 7! I never found more than 1 good plan in a state. This is key. When you see your state listed below, make sure you only invest in the exact state plan that I show. Otherwise you could end up in a stinker of a plan. I have a direct link for you to the good plan in a state. If you just click on my link below you won’t mess up and go to a bad state option.

If your state is not listed, invest in one of the three elite 529 plans in the U.S. that are listed first: Utah, New York or Iowa.

To see the state rankings and gain access to the best program links, go to http://clarkhoward.com/topics/529_guide.html.

The 529 college savings plan may not be for everybody, but for many people it can a great way to save for college. Glad to see Utah with a great plan!

See, there are cool things about Utah, in spite of my pro-Wisconsin bias. And this educational savings honor may even make up for Utah’s shortcomings in terms of excessive marshmallow consumption and the lack of healthy polka activity. Sadly, it doesn’t compensate for Utah’s insane approach to traffic safety and fundraising, but that’s a problem of the State Highway Patrol and need not reflect on Utah’s general populace.

Meanwhile, to all of you in Utah or anywhere else: save more money now. Save like there’s no tomorrow, because there is a tomorrow – and your family will be broke then unless you do.