The Best Reward Apps To Help You Save For College Today -

by Danielle Pietersen

Saving for college can be a daunting and serious task. Using reward apps is a fun way to take the pressure off and help you add to your college savings while setting yourself up for a secure financial life. You’re not going to be able to use rewards to save the full amount you’ll need, but if you’re using them regularly and consistently, the small rewards start to add up to big amounts.

How Do Reward Apps Work?

There are various reward apps that help with your college savings plans, but essentially they are rewards programs that allow you to deposit your rewards into a 529 savings account just by using your phone. You could be rewarded for everyday purchases or paying with a particular credit card. The rewards and rules depend on the specific app or program that you sign up for. Most rewards apps that are specifically for saving for college need to be linked to a 529 plan.

Why A 529 Plan For College Savings?

A 529 plan is designed specifically for saving for education expenses. There are many 529 accounts to choose from and the rules for each one differ slightly. All of them are tax-advantaged savings accounts, which can help you save more efficiently for college and education-related expenses.

There’s Far Less Tax

As the money in your 529 account grows, you won’t pay federal tax on it. You also don’t need to pay tax on money that you withdraw, as long as the money is used to cover educational expenses. The rules governing 529 accounts are simple and specific.

529 Accounts Earn Decent Interest

529 savings accounts typically earn good interest without being subject to federal taxation. That means that they can grow for many years with little admin and effort. Your money will be safe and growing over many years. Money invested early and for a long time can compound and grow significantly if it is earning good interest.

The Best Way To Pay For College

Although there are a number of scholarships and grants available to college students, most students will end up paying for at least some of their studies through student loans and with money that has been saved up.

Try Scholarships First

Before you start using any savings and loans, you’ll want to apply for as many scholarships as you can. Scholarships are free money and it’s worth the extra effort to cut down on any debt or savings that need to be accessed. Once you’ve maxed out the scholarships, you’ll need to cover the rest of your expenses using existing savings or by taking on student loans.

Then Use Your 529 Plan

Money from a 529 account is not taxed if it’s used for educational purposes, which means that any money you save towards college goes directly towards your expenses without being taxed. To make full use of the tax advantages of your 529 plan, you’ll want to use these savings first. Once your 529 plan has been exhausted, you can start dipping into other savings accounts or looking at student loans and financial assistance.

Money that you withdraw from a 529 account is only tax-free if it is used to cover costs related to education. 529 money will cover all tuition costs and certain costs related to accommodation, books, and other education-related expenses. 529 accounts can also be used to cover k-12 education expenses.

What If There’s Money Left Over?

If the person does not end up going to college or receives a significant scholarship and does not need the money, then the 529 account can be transferred and used to pay for the education of a different family member. If for some reason the money cannot be used for education-related expenses, it can still be withdrawn but will be subject to tax and certain penalties.

How Do I Put Money Into My 529 Account?

A 529 account works just the same as any bank account. You can start the account off with a lump sum and leave it to grow. Many people set up automatic contributions to be transferred to the account each month. Others choose to add to the account when they have extra money.

Try A Rewards App

A fun and painless way to keep adding to your 529 account is to link it to a rewards app or 529 credit card. These apps allow you to earn points or rewards as you go about your daily life. You could earn rewards for online shopping, eating out, and even just swiping your card. These rewards are then added to your 529 account. This means that you are making small, but consistent contributions to the fund over a long period of time. Some apps also make it fun and easy to track your progress and keep saving for college on your mind.

How Much Do I Need?

It’s hard to say how much money you will need to pay for college. The amount can vary greatly depending on which school you choose and how much money can be made available through scholarships and other sources.

According to the National Center For Education Statistics, the average cost in 2018 was around $34000 for an undergraduate degree. That number is slightly lower for in-state institutions and substantially higher for public institutions. The number is based on a bachelor’s degree qualification and will be less for a two-year course.

Savings or Prepaid Tuition?

You can choose between a savings plan or a prepaid tuition plan for your 529 plan. Savings plans are far more common, cover a wider range of expenses, and are more flexible. A prepaid tuition plan allows you to lock in the cost of tuition, usually at the current rate even if the student won’t be attending college for many years. The downsides are that they are usually for specific institutions and only cover tuition expenses, so you’ll need other savings to cover the remaining costs.

Start Early

Obviously, the earlier you start with a college savings plan, the longer you have for your investment to grow and the more likely you are to meet your long-term savings goals. Investing a small amount of money over a long time can help you save for college tuition without breaking your budget.

If you’ve left it late, don’t despair. You’ll need to start making larger and more regular contributions, but 529 funds can also be used to pay off student debt. This means you can keep making contributions through the college years or use a rewards app to help a family member pay down college debt.

What are 529 Credit Cards?

529 credit cards are regular credit cards that will give you a percentage of your monthly spend back. This cash goes straight into a 529 fund to which helps you to be saving money without feeling it in your budget. You earn cash to add to your investments on every credit card purchase that you make. Many credit cards will offer a variety of cashback and rewards options, but what makes 529 cards different is that those savings go straight towards a college savings account.

Which Card Should I Choose?

There are a few cards that offer this option to pay straight into your college fund. If you’re looking for one, check out The Futuretrust MasterCard, Citi’s Upromise MasterCard, and Fidelity’s 529 Rewards AMEX card. They offer slightly different benefits so it’s worth looking into each one and deciding which card will give you the most cashback based on your lifestyle and where you frequently shop.

What Is Upromise?

Upromise is one of the best money-saving apps when it comes to investing in college. It helps you save for college through the little things you do every day. It’s never too early to start saving for college and with Upromise, saving can even be fun for families.

How Does Upromise Work?

Upromise is easy to join and no banking info is required to sign up. There are a variety of ways you can get cashback. The most obvious is by using your Upromise Master Card, but you can actually earn even more cashback when you dine out or shop online.

Simply create an account, link it to your 529 college savings plan, and start working towards your long-term goals today. Upromise makes it easy to invest in the future. Many parents and grandparents choose to join Upromise when their children and grandchildren are still young. By the time a kid is ready to become a college student, the account has grown and the parents have been spared a significant tuition cost.

Use More Than One App Or Credit Card

Of course, you don’t have to choose just one app, card, or way to save money. Search for apps and cards that offer their services for free and then sign up for as many as makes sense. There are also some amazing rewards apps like Swagbucks that offer coupon codes and rewards to help you save in your monthly budget.

There’s a whole world of rewards sites, coupons, and promo codes out there. They might give you money back on certain products or offer significant discounts on others. Some sites will even reward you for completing tasks like filling out a survey or watching a video. Every little saving or reward is worth it when you’re working towards a long-term goal like saving for college.

A rewards site like Swagbucks isn’t focused on saving for college, but they offer so many great rewards and ways to earn cashback, that you may find that you have extra money freed up in the month. When it comes to survey apps, Swagbucks has the best paid online surveys and best survey taking experience. But there are easier ways to earn too, like answering daily polls, scanning receipts, or searching the web. This is great for parents who are trying to balance making contributions to college funds and meet all the usual monthly expenses.

Keep Debt Down

When you’re earning rewards for shopping and dining out, it can be tempting to live above your means and spend money that you don’t have. Credit cards and rewards programs are wonderful tools, but they can also get you into serious financial trouble. Only spend the money that you have. Credit card debt is expensive. There’s no point in earning rewards and cashback if you’re paying more in interest on your credit card debt than what you’re contributing to your 529. Following expert advice and taking control of your financial life are the best ways to ensure that you’re able to save for the future.

The Best Reward Apps To Help You Save For College Today