Investment Tips: How to Save for College

Tip #1: Sign up for Upromise
You know those little grocery store cards? And your debit and credit cards? Sign up for Upromise and give them the numbers to all the cards you use for shopping. Then, if you buy something that qualifies you will recieve money back that they will put into an "account" at upromise.com. This money can only be used to pay back a loan taken out to pay for college, an AES loan.

Extra tip: Sign up your grandparents and other relatives too. Their spending will earn you even more money back and it is a way for them to contribute to your education (or your child's).

This is something that can really earn a lot if you start it when your child is young, but it is also helpful to start one for yourself as well. I am in college now and I have an account with Upromise. I only have 2 grocery cards signed up, no debit or credit cards and I have earned about $5.00.

There are many companies that are a part of this program. Shopping with them and/or buying their products will earn you a percentage back for your Upromise account.

Bed, Bath, and Beyond
Citi
GNC
McDonald's
Pep Boys
The Sharper Image
Whirlpool

Other Ways to Save

A 529 Savings Plan
What is it?
It's an education savings plan operated by a state or educational institution. They are designed to help families set aside funds for future college costs. As long as the plan satisfies a few basic requirements, the federal tax law provides special tax benefits.

According to savingforcollege.com here are some top benefits to a 529 savings plan:

"First, you get unsurpassed income tax breaks. Your investment grows tax-deferred, and distributions to pay for the beneficiary's college costs come out federally tax-free.

Second, you the donor stay in control of the account. With few exceptions, the named beneficiary has no rights to the funds. You are the one who calls the shots; you decide when withdrawals are taken and for what purpose.

Third, a 529 plan can provide a very easy hands-off way to save for college. Once you decide which 529 plan to use, you complete a simple enrollment form and make your contribution (or sign up for automatic deposits).

Finally, everyone is eligible to take advantage of a 529 plan, and the amounts you can put in are substantial (over $300,000 per beneficiary in many state plans). Generally, there are no income limitations or age restrictions."

Savings Bonds
When I was a baby, everyone got me savings bonds for college. That was a good way to save for college before all these savings plans and such came out. Are savings bonds still a good bet today?

E/EE Bonds
$25 for a $50 EE Bond when purchasing paper bond certificates

Series EE savings bonds are safe, low-risk savings products that pay interest based on current market rates for up to 30 years for bonds purchased May 1997 through April 30, 2005. Series EE bonds purchased May 2005 and after will earn a fixed rate of return.

Use EE Bonds to:
Finance education
Supplement retirement income
Give as a gift

Interest earnings are exempt from State and local income taxes, but are subject to Federal, State, and local estate, inheritance, gift, and other excise taxes. Interest earnings may be excluded from Federal income tax when bonds are used to finance education.