Pennsylvania mom Mary Yager has saved nearly $11,000 in about 12 years for her two sons' college educations without a dime coming out of her own budget.
Yager is a member of Upromise, a college savings rewards program, which offers rewards from online shopping as well as grocery, real estate and credit card purchases.
"My eldest son was just a baby when Upromise started in September of 2001," says Yager. "It was affiliated with a credit card I already have. This is a no-brainer."
Below are three ways to earn college savings through purchases.
[Don't make these mistakes when saving for college.]
1. Upromise rewards: The Upromise rewards program, founded in 2000 and now owned by Sallie Mae, has been around for nearly as long as the tax-advantaged college investment accounts known as 529 plans have existed.
After a parent registers for a free account on the program's website, he or she can then look for online or retail locations that work with the program. Parents can opt for cash to go into a Upromise 529 plan, go toward paying off a Sallie Mae student loan or have a check cut quarterly so they can invest the money elsewhere. A Upromise credit card also offers cash back on purchases.
Yager uses multiple strategies to accumulate Upromise savings. She attached her grocery store savings card to her Upromise account to earn money on grocery purchases.
When she shops online, she starts on the Upromise site, finds coupons on the site to save on what she's buying, and then clicks through to a store to purchase the item, earning back between 1 to 12 percent of the cost, depending on the item. She even sought out Century 21 realtors participating with the program when she bought a new home.
Free rewards programs are a way to get friends and family to help out as well. Yager's mother, Jean DeVries, donates her Upromise shopping rewards to her grandchildren, as does a family friend who doesn't have children.
[Get college cash from 529 sales and contests.]
2. Online shopping rebate programs: Parents can join online shopping rebate programs to earn back a percentage of online purchases. The exact percentage varies among participating online retailers.
The money back from programs like Ebates or Mr. Rebates can be used for anything, but parents can accumulate a significant amount to put toward college savings.
"On average Ebates members will earn $200 per year in cash back," says Brent Shelton, a spokesman for the company. "More than 60 percent of our members have four-year college or graduate degrees, so many of them recognize that earning cash back on things they need for their families today is an opportunity to help cover future college expenses."
If a parent receives $200 per year over 10 years in cash back rewards, that would be $2,000 they could deposit into a 529 plan to save for their children's college educations.
[Take these steps before opening a 529 plan.]
3. Cash back credit cards: Any cash back card can be turned into a college savings vehicle, says Beverly Harzog, a credit card expert and author of "Confessions of a Credit Junkie: Everything You Need to Know to Avoid the Mistakes I Made."
"If you've got a cash back card, set up a 529 plan account to deposit all your cash back savings," she says.
In addition to cards often offering cash back savings as a percentage of purchases, look for cards with special offers throughout the year, Harzog says. Right now, Chase Freedom is offering 5 percent cash back on purchases at Kohl's, theme parks and gas stations, she says.
The offer lasts until the end of September, but the card offers different deals every quarter, according to its website.
The Blue Cash Preferred card by American Express offers 6 percent cash back on grocery purchases up to $6,000 per year. That's $360, which adds up to $3,600 in 10 years. Parents can also check out both Upromise- and Fidelity Investments-affiliated cards, where cash back is directly deposited into a 529 plan.
Parents shouldn't underestimate the total value of these programs. "My friends think I'm crazy when I look for different ways to use Upromise, but a buck here, a buck there adds up," Yager says.