Useful tips for saving money for college

Save Money By Spending Money

You're probably familiar with airline frequent flyer programs. The idea is simple: You earn frequent flyer miles that you eventually redeem for a free ticket. It's a nice benefit for when you'd fly anyway. It's also good for the airlines since you'll stick with one company as you build up your miles. Some enterprising companies have brought this concept to college savings. You can earn money for college not by flying but by shopping. These companies rebate a percentage of your purchases from participating retailers into college savings plans.

The rebates range from 1 percent to more than 30 percent depending on what you purchase, and most programs allow you to get your family and friends involved. Everybody can then start to contribute to one person's educational savings. These programs offer a nice supplement to your savings, and over time you can rack up a nice chunk of change.

Since all of these student reward programs work in a similar way, look for the one that offers you the best selection of participating retailers and merchants as well as the highest rebate on the purchases you make most. Also keep in mind that these programs are relatively new and are continuously adding merchants so be sure to check their websites for the most current list of participating stores.

All except for one also offer branded credit cards that allow you to earn rebates on every purchase you make using the card. Upromise, BabyMint and Stockback don't charge any fees to participate while EdExpress charges an annual fee.

Upromise

Upromise is a free service in which companies give you money back for college as a way to earn your loyalty. You can designate your own child, a friend's child, a grandchild, a child you expect to have one day or yourself as the recipient of the reward program. You can change the recipient at any time and enroll relatives and friends to help save for your or your child's education.

After you join Upromise you will need to register your credit or debit cards. As you shop at participating stores a percentage from each purchase is credited to your account, which will be invested in a tax-free 529 Savings Plan. The Upromise system is easy to use since once you register your credit cards you just shop normally and your rewards are automatically credited to your savings plan.

Currently, Upromise has more than 40,000 retail stores and services participating in the program. Visit the Upromise website to get a complete list of participating retail stores and restaurants along with the rebate rates.

What's the best way to use these reward programs?

As with any savings strategy, time is your ally. The earlier you start the better. If you begin these programs 5, 10 or even 15 years before you need the money then you give them a chance to accumulate. The other important key is to multiply your contributions by recruiting as many friends and family members as possible. The more people who contribute their rebates to your account the better. Hit up all of your relatives and friends who don't have college tuition bills headed their way.