Why its a good idea to periodically withdraw money from your Upromise account now

[berlinsmommy]

Okay, I couldn't come up with a good thread title, I'm just not so good with the words today, but I'll try to post my thoughts and experience.

Most of us do not have our Upromise accounts tied to a 529 plan. In that case our money just sits there, not earning interest. It is also takes a long time for the funds to be dispursed, so I'd hate to see someone trying to get the money in time to pay tuition or something like that. Also, for most of us, a 529 plan represents a significant tax bonus, so why not cash out now and start a 529 plan to get the tax break for 2006? Here are my thoughts:

First, are you aware how long it takes to receive your contributions? Checks are cut once per quarter, and thats assuming you get your request in that quarter. I put in a request in early July and haven't seen my money yet.

Second, why let it sit and not earn interest? This is your money! Imagine if your bank had an account that paid no interest and took 90 days to process withdrawls. No one would bank there, yet that is exactly what Upromise does. Take your money out and put it in savings, open a 529 plan, or make a tuition or student loan payment. Heck, make a payment to your credit card if you want, its your money!!!

Third, there is no guarantee the money will be there in the future. Upromise was purchased by Sallie Mae and they are making changes, and who knows what that may bring. By cashing out occasionally you keep a low balance and risk losing very little if the program goes belly up or turns into something you don't want to be a part of (like if it can only be linked to Sallie Mae loans).

Fourth, take advantage of investment opportunities. For example, kids can earn a certain amount of interest (up to $600/year I think) without paying taxes on it, so stash it in a savings account with your kid's name and SSN on it and let it accrue some tax free interest. Or open a 529 plan. For most people, your state's 529 plan (just Google the state name and "529 plan" and you will find it) is your best bet since most states offer state tax credits or deductions for 529 plans. Every state differs, so you will want to research this further, but I just wanted to plant that idea, plus, if you do it now, you should get the money in time for a 2006 tax deduction/credit.

For info on how to get the money out, see Mrs. P's FAQs at the top of this forum. You can only take money that is not pending. I am going to start taking withdrawls every time my balance hits $100 and put the money in Berlin's 529 plan, what about you????

[nemo]

my balance has never even hit$100 abnd I have been a member for like 4 years! wht am I doing wrong???

[mama22qts]

Nemo mine hasn't either. Don't feel bad. I think unless you have someone else contributing to your account it may not add up very quickly. I wish I could get my parents on board but I think that's a lost cause. I do have some of my credit cards attached to it, but I don't use them a whole lot. I don't have the Upromise card, either --- just haven't found a reason that I need it.

Those who accumulate quite a bit -- any tips?

[MOM2SNOX]

I have an account with them too but I'm not sure how much is in it since I started.... guess I should be checking periodically, eh? !!

[MrsPinecone]

I think that once the Pinenut is born, I am going to open an Emigrant savings account for him. The first deposit will be the Upromise balance.

The MD 529 plan doesn't offer any tax credits, and the fees on the account would negate the savings. We can't really designate $___ per month for college savings, so the savings account is a better idea at this point.

[berlinsmommy]

Funny, I posted this yesterday, then got home and my check had arrived!! Mrs. P, when is the Pinenut due? It takes a very long time to get the money, you may want to go ahead and request it. You could always just put the money in your checking/savings and then take it out for the little guy once he gets here.

Also, as far as getting family members on board, I cheated a bit there. I know most of them won't go sign up themselves, but will happily give you their card #s off their shopper cards and Upromise lets you have up to 2 cards per store, so you can sign the cards up as yours, not as friends and family, and then you can easily see the contributions since they are counted as yours. So I share an Albie's card with my brother, have my family (mom, dad, and youngest brother's) Hy-Vee card registered as well as my friend Melissa and her mom (one account for my family, one for Melissa's, so technically 2 cards since each account comes w/ 3 cards plus can be accessed by phone #), have Melissa's and my brother's Dillon's cards, and have a Smith's card and an Albie's card from a girl I used to work with. So I have several households shopping on "my" shoppers cards, make sense?

Maybe we should start a "How I got my Upromise Money" thread. A lot of mine came from Circuit City. DH has a CC there, plus, if you are in the store and want to buy something, there is a kiosk where you can log into the website and "order" it, then choose in store pickup, so you get the online shopping credit even though you are in the store. We try to buy things that are universally priced (such as DH's X-box 360) there to get Upromise credit.

I also shop online at Land's End occasionally and buy the "On the Counter" stuff for dirt cheap, like $2 pairs of shoes, $4 swimsuits, and $3 T-shirts for Berlin. I probably spend $70-$100 through Land's End each year.

And then there was the Beechnut baby food deal, ahhhhh, fond memories, 50c/1 printable coupons, no limits, and the jars were 50c with a 5% contribution to Upromise. I had a whole pantry full of baby food, Berlin was one well-fed kid!!!

[MrsPinecone]

The Pinenut is due 12/3, so I'll add the withdrawal to the list of stuff to do.

I get a lot of money from Land's End, Snapfish, and my brother taking clients to lunch. Glad I hooked him up to my account-- he's added $23 to my Upromise account in the past 2 months.

[JANE4girls]

I did have a 529 through the Upromise site, but closed it. The fees I was being charged were more than the money I made. I had about $500 and just requested a check. I then put the money in DD's ING account. I actually just requested another $78 yesterday.

I have the Upromise citi bank card. So each time I make a purchase with it, I can "double dip" from the MFG and then also Citi bank. I just pay it off at the end of each month. It really adds up fast with that.

I too have family members cards linked to my own account since they don't have one. Much easier for me to keep track of the money, plus then "I" can withdraw it since it is in my account and not their account for my kids.

[Michelle]

Originally Posted by nemo my balance has never even hit$100 abnd I have been a member for like 4 years! wht am I doing wrong???

Same here. However, the Kotex deal at CVS has certainly helped (lol)! With all my newfound couponing deals, about $10 has been added to the account in the past two or three months; considering that it took about four years to earn $30, that's pretty good! :)

[amesw]

Anyone who is not getting much should review their profile and ensure that all their grocery cards and credit cards numbers are 1. entered correctly and 2. activated. Then, you should remember to use credit instead of debit as debits don't count.
these steps have boosted my family's upromise savings from $50/year to the maximum allowed!