Wanting the best for your children is easy. Paying for it is much harder, especially when it comes to college. That’s why education financing experts, including Mark Kantrowitz, senior vice president and publisher of edvisors.com, encourage saving early and often.
While that may be difficult for many parents (especially those still repaying their own student loans), there are still a few things you can do to boost your college savings effort without straining your budget.
Shop your child’s way into college
“I really like Upromise.com, because you can set it up and forget about it,” says Kantrowitz. The program funnels cash rebates earned through online purchases directly into an affiliated 529 college savings plan. Better yet, family and friends can also link their purchases to your child’s account. With rebates—typically 5 percent—available from popular retailers on what you would be buying anyway, Upromise.com is a way to potentially save an extra several hundred dollars a year for college. The program also has restaurant and grocery store components for earning more rebates for your account.
Upromise also offers a credit card. Instead of air miles, the cardholder earns cash that is deposited directly to a 529 college savings plan. Similarly, Fidelity Investments also offers credit cards—both a Visa card and an American Express card—with 529 college savings plan rewards programs.
BondRewards.com is another retailer-based program worth considering. It redirects cash rebates earned at leading retailers into U.S. Savings Bonds, which can be used for college or if Junior wins a scholarship, the bonds may be used to help fund your own retirement. Its retailer roster can differ from Upromise’s, which makes being a part of both of these free programs advantageous.
In a twist on the idea of being rewarded for something you would be doing anyway, the Sage Tuition Program offers points for saving or investing with—or in some cases, being employed by—its member institutions. The points earned through this program are redeemable at over 300 colleges as tuition credits.
A penny saved, a college credit earned
Bank of America offers another option for pain-free savings. Its “Keep the Change Savings Program” enables you to accumulate savings in a small, unnoticeable way. The bank rounds up the amount of every purchase made on enrolled debit cards. The difference between what you owe and what is taken from your account is diverted into a savings account that you can earmark for college.
Sometimes it takes a village
A number of online programs have cropped up to allow family, friends, and even employers to crowd fund your children’s education. GradeFund.com, for instance, allows sponsors to reward your child’s good grades with savings contributions. AngelDorm.com simply provides a platform for students to receive scholarships based on the achievement of academic goals, a demonstrated ability to overcome adversity, and a willingness to serve others. Both programs, however, charge small fees for collecting the savings.
As hard as it is to consistently save for your children’s future education expenses, there are options available that can boost your savings by squeezing extra deposits from your everyday spending and gifting activities.