Entrepreneurs have a unique challenge when planning for their children's college educations because they are also starting and scaling their business. Should they start saving monthly in some type of college savings plan? Should they focus on growing their business and use future excess cash flow for education expenses? Or should they do a combination of both?
Given how different one founder's situation can be from the next, there really is no silver bullet to ensure a child's education will be paid for in the future. Everyone wants to plan ahead for their kids' educations, but how they do it should be based on their unique situation and certainly requires some customized planning, updated regularly.
However, the following is a way we can leverage the money we are already spending and will help save money toward those future education expenses. (For related reading, see: Pay for College Without Selling a Kidney.)
Save Money by Getting Cash Back on Purchases Through Upromise
Upromise is a plan sponsored by SallieMae to help people save for college by earning cash back on money they are already spending on a variety of things, from groceries to travel.
After signing up, you will need to register the credit cards you use to get credit for your spending. You can register personal and business cards. Next, you can search through their extensive list of approved partners where you earn cash back. Their marketplace is quite extensive, so make sure to look through it for places where you are already spending. The cash-back offers range from a few dollars to around 10% of the purchase price, so depending on what you are buying, these cash-back offers can add up to real savings!
How You Can Use Your Savings
Your rewards can be used as follows:
- Deposit into a 529 savings plan
- Deposit into a savings account (possibly eligible for up to a 10% annual match)
- Pay down existing student loans
- Request a check to be mailed to you
As you can see, you can use your cash-back rewards virtually any way you like. You could be spending your money online for personal expenses, going out to eat, school supplies, computers, recreation, gift cards, and the list goes on. The point is that you should be doing this, it doesn't cost you anything extra and you now are actively putting money away for your child's education.
An Example Including Frequent Flyer Miles
Ok, so all this sounds great, and it is, but what does it actually look like in practice? The following is a general example, based upon my own spending, of what you could accumulate from leveraging the Upromise and Delta Skymiles programs at the same time. Keep in mind this is just one example of many. (For more from this author, see: How Entrepreneurs Can Leverage Frequent Flier Miles.)
Let's say I am spending about $30,000 a year for office and business travel expenses. For simplicity's sake, let's break it down to $5,000 on office expenses and $25,000 on travel (airfare, car, hotel).
Using my Platinum Delta SkyMiles® business credit card, I earn the following through Upromise:
- 5% cash back on Vistaprint office expenses (assume $1,500) = $75
- 10% cash back on Staples copy and print (assume $1,500) = $150
- 5% cash back on 4INKJETS ink & toner (assume $1,000) = $50
- 5% cash back on Quill.com general office supplies (assume $1,000) = $50
Total cash back = $325 (which can be directly contributed to a college savings account for your child)
Using my Platinum Delta SkyMiles® business credit card, I earn the following:
- 1 mile for the $25,000 I spend on office expenses = 25,000 miles
- 2 miles for all flights booked with Delta (assume $20,000 in airfare) = 40,000 miles
- 1 mile for my Hertz car rentals (assume $2,000) = 2,000 miles
- 1 mile for my Starwood Hotel stays (assume $3,000) = 3,000 miles
Total Skymiles = 70,000 (equal to at least a $700 flight anywhere Delta flies)
Leverage Works
The bottom line is you would receive over $1,000 in cash back and frequent flier miles from money you were already going to spend. You can use it to help fund your child's education while also being able to enjoy some traveling with your family now. Just imagine how this can add up if you are running a business with significant expenses.
We all spend money on a variety of things for a variety of reasons, so why not incorporate it into our financial planning so we can have more fun and get more out of our money now and in the future? Money is not just an idea, it is also a tool. Learning how to leverage it can provide so many benefits for you, your family and your business.
(For more from this author, see: 9 Ways to Make Money With Passive Income.)
cr. https://www.investopedia.com/advisor-network/articles/upromise-how-leverage-money-youre-already-spending-your-kids-education/
ไม่มีความคิดเห็น:
แสดงความคิดเห็น