Upromise can help you save for your kids' college ... but be prepared to shop for it

If you're a parent and have children who aren't in college yet, I'm guessing you've probably heard about Upromise.

Not sounding familiar? Upromise is a company, now owned by Sallie Mae, that designed a program that offers shoppers cash rewards at various retailers. A small portion of the money you spend at the retailer is kicked back into your Upromise account, which you can hook up to a 529 college savings account.

Here's how it works: The basic idea is that if you're going to be shopping anyway, you may as well choose to make purchases from a Upromise partner and start accruing money for your kids' college education.

You become a member (it's free) and register your debit or credit cards at the Upromise site, and then start shopping. If you prefer to shop online, you should start any online shopping you do through Upromise.com (otherwise, the money won't wind up in your account). If you're shopping in the real world, you look for stores, restaurants and other businesses that have partnered with Upromise, and as long as you pay with your debit card or credit card (the ones you registered at the site), you'll have some of that money diverted to your Upromise account.

Merchants like it, because it's another way to entice shoppers to their store. Consumers like it because it's a fairly painless way to save money for college for themselves, their kids or their grandchildren, or to pay down student loans.

I've been a member probably since the time Upromise came into being, which was April 2001. The oldest of my two daughters was born several months later, and I was excited about starting to save for her college education. So I set up a Upromise account, registered my debit card, and every time I went grocery shopping -- they were very big then on partnering with companies selling products at grocery stores -- I would often veer toward the items that had a Upromise sticker on the shelf.

After awhile, I eventually grew a little less excited. After all, only tiny percentages of your purchases go into that Upromise account. For instance, if you're buying a box of crackers for $3.29 and getting a 3% kickback toward college savings, that's about 9-cents. Now, about nine years after joining, I have in my account ... $79.33.

Yep, my daughters are going to go to a swell college.

At this point, because I don't want readers writing in to berate me for having saved just $79 for my children's college education, let me say that I also have a 529 account for each of my daughters, who are currently just eight and six years old, and we have considerably more than $79 saved in those accounts. But for some time now, I've been thinking it'd be interesting to talk to someone who's been really shrewd about how they utilize Upromise.

So I contacted Upromise and asked if they could divert me to some of their "star" members, so I could pick their brains and see how they've gotten to where they are. Not surprisingly, Upromise happily obliged.

Upromise provided me with contact information on two people: Jeff Fielkow, living in Milwaukee and a vice-president of a Swedish-based company with offices in Chicago, and Renee Hirshfield, a small business owner in St. Louis. Both were nice enough to spill the beans on what they've done to maximize their Upromise earnings.

Of course, the first question I had for both of them was how much had they had collected through Upromise. Hirshfield joined the program in 2001, as I did, and has so far earned $2,044.84, which definitely makes my measly $79.33 look like chump change. She has a 20-year-old attending Mount Holyoke College in Massachusetts who will likely be attending graduate school after she graduates.

But Fielkow, who also joined in 2001, truly puts me to shame. He's earned a little more than $4,000, and he still has plenty of time left before his kids go to college. His daughter is nine; his son is just five.

Of course, no one's going to put their kid through Harvard solely on their Upromise savings, and I suspect even the folks at Upromise wouldn't want you to think that. But $2,000 and $4,000 are at least some considerable chunks of change to add to the pile of money needed to put someone through college. So what are these two doing right?

Bring in the friends and family. Fielkow says that he didn't just register his own cards to Upromise but also those of his mother and his wife's parents. "They're definitely in the passive category," says Fielkow. "Every few months, I'll look, and I'll see a few dollars have been added. My guess is that whatever is amassing is whatever they've been buying by chance, whereas I make a conscious decision to buy something through Upromise. But, hey, it still adds up."

Upromise has a credit card. Hirshfield hasn't gone that route yet, and neither have I. But if you're in the market for one, Fielkow says that it can really help you get some mileage out of Upromise. He adds that he's been careful not to carry a balance (No kidding! Hundreds of bucks in interest charges would sort of defeat the purpose of a few cents or dollars being diverted toward college savings). The APR ranges from 12.99 to 20.99%, depending on your credit history. If you make one qualified purchase using the card, you automatically get $25.

Buying big purchases through Upromise makes a big difference. "One of the biggest Upromise rewards I've ever received is no longer available, but around 2004, General Motors had a deal where you could get $150 by buying one of its cars," says Hirshfield. "Now, I wasn't car shopping, but as it happened, my car was rear ended, my car insurance declared my car totaled, and so in January 2004, I think right before the program ended, I bought a Pontiac Vibe."

If you're in the market for a computer or an appliance, and you have Upromise, you could plan ahead and make the purchase through Upromise.com. (you can always go to the store and window shop first, says Hirshfield), that'll divert a bigger amount of money into the account. After all, 3% or 4% of a dishwasher is a lot more than the same percentage of a tub of toothpaste. You can even buy a house through Upromise -- if you go to the Upromise web site and track down Century 21, Coldwell Banker or ERA. It doesn't say on the site just how much you can earn, but presumably, it's fairly substantial.

Using Upromise is an ongoing strategy. "You have to have a certain discipline about it and a certain mindset," says Hirshfield, who adds that she loves online shopping, which Upromise helps with a lot. Rather than going into a Barnes & Noble, which won't bring in any money into her Upromise account, she'll buy her books online. She recently used Drugstore.com "because I can get some products there that I can't find locally--I get s6% into my Upromise account from that."

In other words, if you're thinking about signing up for Upromise and changing your shopping habits subtly, just by buying everything you were buying anyway but now doing it with Upromise in mind, you might have a good shot at getting numbers like Hirshfield and Fielkow's.

If you use my approach, well, maybe you can use your money to buy a lamp or a nice rug for your child's dorm room.

That said, Fielkow thinks I'm being a little too hard on myself. "There's no such thing as a failure in this program," he says. "Every dollar makes a difference, whether it's $80 or $800 or $8,000. It all helps, every penny helps."

I really can't disagree. And if nothing else, shopping via Upromise does keep your children's college education constantly on the front burner, serving as a constant reminder to save for college -- and to save in general -- and that, as we all know, is not a bad thing. Not a bad thing at all.

Geoff Williams is a frequent contributor to WalletPop. He is also the co-author of the new book Living Well with Bad Credit.
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