Saturday, February 19, 2005

About Upromise

So for about the last year, my wife and I have been using Upromise. You've probably seen their little logo on things at the store at wondered what the deal was. Here you go.

See, Upromise works together with a bunch of products and restaurants and gas stations and other places, and every time you purchase one of those products or dine at one of those restaurants or fill up at one of those gas stations, a percentage of what you spent goes to a "savings" account for your child (or children) or a child (or children) you know.

The savings percentage varies depending on the product or service you buy, anywhere from 3-10%.

The ads say this is a way to "invest" in the child's future, but that's a little misleading. The nickels and dimes that various companies put into your account do not actually go straight into any type of "investment" account. The site does give you the option of setting up a 529 account through Vanguard, but the minimum contribution is $50 a month. At 3% savings per item, you would have to buy $1,666.67 worth of groceries to qualify. If you eat out a lot, and went to restaurants that gave you back 10%, you could get that $50 by spending $500 a month eating out.

Of course, you could just come up with the fifty bucks. Before you think, "Oh, that's too expensive," remember--it's not a fee. It's really an investment. It stays your money. It's fifty bucks a month you're setting aside to pay for your child's education. It's a special savings account that has certain tax advantages. Fifty bucks a month, invested for ten years at 11% interest would give you $11,000 when it came time to send Junior to school, even though you only paid $6,000 in.

Even if you don't have the fifty bucks a month to save yet, you may as well join one of these places. There is no cost and there's some free money.

How much?

Well, I've been doing it for around a year now. Prior to today, I have never once checked my balance. I have also never once made a purchase based on what would get me Upromise money and what wouldn't. In fact, I am partial to one brand of gasoline that does not work with Upromise.

So, how much was in that account when I checked it today, after all this time?

$4.22. Divided equally between my two daughters, that works out to $2.11 each.

About half of that was made in the last 120 days. Now that my wife has begun coupon shopping, we're buying more of the brand-name products that participate. However, since they pay you as a percentage of the price you paid, and we're using coupons and double coupons to not pay much at all . . . well, you see the number.

Although 75 cents of that came from one trip to Red Brick Pizza I took last year, dining alone, so if you eat out much it may be more worth it to you.

Either way, it's money to my name (or my kid's names) I wouldn't have had if I didn't join up. Joining didn't cost me anything, so why not?

As long as I don't make stupid purchases just because I think I'm getting something out of it in Upromise dollars, there's no possible pain, and a little gain.

Okay, very little.

1 comment:

Rebecca said...

I signed up for Upromise in November 2002 when my friend had her son. I, too, have not made any purchases just because of Upromise, although I have made it a point to click through Upromise to make purchases when going to a site (like Dell or HP) that participates. The way that I read it was that now money would be transfered until I had reach $50, but then money would be transferred regardless of amount every statement period (quarterly). Of course I'm not the one who set up the investment account, so I don't know all the rules. My balance just gets transferred to my friend every quarter (after the first $50 built up).

Anyhow, Upromise doesn't offer very good account history. For example, it always says $0 as portion invested. As soon as the amount is transferred to my friend's son, it is no longer to be seen except on the previous statement, which is only there until the next statement comes out. So I don't know the exact amount that has been transferred, but I believe it's over $100. This current statement I've accumulated $12.38 and last statement, I accumulated $0.22.