Saving without actually saving 

Most parents, myself included, hope to be in the position to help our children with college costs when the time comes. But that doesn’t mean we’re in the position to save for that five- or six-figure expense while also footing the bill for swim lessons and summer camps. 

Did you know there are ways to put money away for college without actually saving?

1. Charge it!

There are reward credit cards that earn airline miles, and others that give you cash back for eating out. It’s no wonder that banks have honed in on the college savings set and developed credit cards just for us. Instead of getting 2 percent cash back, make purchases with the Fidelity Investments 529 College Rewards American Express and 2 percent is deposited into a college savings account. The Upromise MasterCard deposits 1 percent of purchases into a 529 account and has bonuses for spending in certain categories. 

If you’re not in the market for new plastic and already have a cash-back card, be disciplined about socking those earnings away for college and you’ve made your own college savings reward card. 

Do you carry a balance? Finding a card with the lowest interest rate, not the best rewards, will increase your chances of retiring that debt before your kid heads to college, a goal with a far better payoff than a rewards card. 

2. Save when you shop.

Sign up with Upromise.com and Babymint.com and a percentage of your total will be deposited into a college savings account when you shop at participating retailers online. 

I bought school clothes at Lands End and 6 percent of my total was placed in my account. 

I also earn when I grocery shop at Rainbow Foods and buy certain products. Still, take the time to price compare and clip coupons. It’s not worth spending a buck more for a certain name brand item on the Upromise dance card just to have a dime deposited into a college account. 

Both sites encourage you to invite friends and family to link their spending to your account as well. Upromise claims that users who do so have three times as much saved for that increasingly pricey sheepskin.

3. Plan a mortgage-burning party.

With historically low mortgage rates, it may be possible to refinance into a 15-year mortgage, shaving years off your loan yet making little difference in your monthly house payment.  

How does that help with the tuition bill? On average, 37 percent of college costs are paid for by parental income and savings, according to the recently released Sallie Mae and Gallup “How America Pays for College” report. If you can’t afford to save much now, focus on how you can structure your finances so that you will have more money to contribute from your earnings down the road. 

Kara McGuire is the Star Tribune’s Personal Finance columnist and a St. Paul mother of three. Ask her a money question at karamcguire.com.

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