Start Here » Tips » Finances » CollegeBacker 529 Funds with Cash Back Shopping

Saving with TaLis is a reader supported website and may earn a small commission from affiliate links in some articles. Please read my full disclosure HERE. Thank you.

CollegeBacker 529 Funds with Cash Back Shopping

Fund your kids college education with Collegebacker cash back app. Earn Backer Bucks to grow your college savings

What is Collegebacker

CollegeBacker is a 529 college savings plan that allows users to grow their child’s college fund through either direct deposit from another bank, Venmo, PayPal, contributions from friends and family, or through cash back shopping.

If you shop online, get rewarded for it. CollegeBacker gives you what they call Backer Bucks – aka cash back rewards – when you shop at any of their online merchants. Backer Bucks are then deposited into the savings account, helping you save for your kiddo’s college education.

Users can also earn cash rewards by downloading and trying out mobile apps, refinancing their student loans, accessing online learning for their kids, doing their taxes, and signing up for other web or app-based services.

Collegebacker – Promotions & Cost

All managed investment plans have a fee. The additional fees are the result of management, transfers, and other overhead fees. CollegeBacker fee structure allows families to choose their own monthly fee, starting at $1.

There is no cost for the gifting program or the cash back rewards program. In addtion the current CollegeBacker promotion gives first month free when you sign up.

Overhead fees are lower than brokers and traditional advisors, as CollegeBacker is a robo-advisor platform that focuses on education savings.

Get Ready for College

Time needed: 5 minutes.

Steps to get started with CollegeBacker

  1. Download CollegeBacker

    Enter your name, Email, Password and click Get Started

  2. Choose type of account

    You can either open a new 529 savings plan, or if you already have a 529 plan you can combine them. Just enter the name of your existing college savings plan.
    Alternatively, you can start saving with a Backer Safe, an FDIC-insured savings account.

  3. Enter your child’s name or choose “i’m saving for a future child”

  4. Choose an avatar

  5. Answer a few questions about your financial goal

    Enter how much you’d like to save
    how often – once, monthly or annually
    Pick a day to transfer deposits and make a contribution
    Note: Collegebacker will match $15 after you make a $25 deposit.

  6. Invite family & friends

    Everyone you wish to invite can easily contribute to the savings plan. Simply click the share icon and choose from contacts.

Parents aren’t the only ones who can start a CollegeBacker account – Anyone can set up an account to help with the child’s college education

There is no limit on how many 529 plans you can have, and having more than one means different investment options to maximize savings



What is a 529 Plan?

529 Plans are tax-advantaged investment plans. What is enticing about these plans is that withdrawals for qualified education expenses remain free of federal income tax, among other benefits, terms, and conditions. Those expenses include K-12 schooling and college costs such as tuition, books, housing and dorm room expenses, and other school supplies.

Collegebacker is an investment advising company operated by Principly, Inc., regulated by the SEC – the Security Exchange Commission – an independent Federal agency whose job is to monitor securities companies, self-regulatory organizations, and the stock markets in order to protect investors.

The company was founded in 2015 by Jordan Lee with the purpose to make it simple and easy for family and friends to invest in a 529 Plan and help pay for a child’s college education.

Missing Financial Opportunities

A recent study by financial services firm Edward Jones found “the number of Americans who do not recognize a 529 plan as an education savings tool has risen to 67% – a 5 percentage point increase from 2012, the year the survey was first commissioned. Of those who correctly identified a 529 plan as an education savings vehicle, almost half (48%) were unaware it can be used to pay for qualified K-12 tuition expenses; 50% of parents with children in the household younger than 18 said the same”.

Simply, families aren’t saving enough for college. The reasons? Lack of awareness. People still don’t recognize the benefits of a 529 Plan.

It makes sense that if you don’t understand something, especially when it comes to money, why invest in it. However, Collegebacker claims to make it easy for anyone to start a 529 Plan savings account in a way that is user friendly but also help anyone contribute to the account by setting up a gifting page. The twist is that there’s no need to get personal information about the kids or to fill out an additional application in order to make contributions.

Typically, signing up with a 529 Plan savings account requires writing a check or in some cases linking a bank account. Collegebacker allows users to also use credit or debit cards as well as bank transfers – both to make an initial deposit or to gift contributions. While there is a 3% processing fee on credit card transactions to over costs with the processor, but don’t charge a processing fee for ACH (bank) payments though.

Gift contributions is a great alternative for grandparents to contribute to their grandchild’s education without affecting the child’s financial aid, as it is better to make a gift contribution to Collegebacker rather than setting up their own 529 Plan on behalf of the grandchild.

Here’s why:

The Wall Street Journal wrote an article about saving for college that explains how a grandparent’s 529 Plan savings account affects a financial aid package, giving this example:

“$10,000 in a student- or parent-owned 529 plan will reduce eligibility for need-based aid by as much as $564, while $10,000 in a grandparent-owned 529 plan will reduce aid eligibility by as much as $5,000.”

The Wall Street Journal, Journal Reports: Funds & ETFS “How a Grandparent’s “529” Account Affects Financial Aid.

Surprising isn’t it? You’re trying to help the kid and instead it may work against them. This is why its best to consult with an advisor. Collegebacker cites that clients are advised on a non-discretionary basis, which means that you, rather than Collegebacker, will select your investment.

Just about every State as well as investment firms offer a 529 plan savings and other savings alternatives. If you have a 529 plan already, connect it to CollegeBacker and start saving more.

Wondering how much to invest? Checkout Collegebacker calculator on their homepage. Plug-in some numbers to get an idea of what your savings will be.

Try the Collegebacker Calculator

Collegebacker has a simple, robo-advisor approach which simplifies the sign up process to make it simple for users. “We ask a couple of questions and then recommend an age based investment fund based on their risk preference”. 

If you’re not ready to start a 529 plan, you can select a Backer Safe, aka savings account. Then when you’re ready, CollegeBacker will assist with investment choices and help you with any required documentation. Collegebacker currently advises on approximately $2.25 million in client assets*

To invite friends and family to contribute to your kiddo’s college savings, CollegeBacker will provide you a customizable landing page for each child you sign up. There is no limit on the number of people that can contribute into an account.

“Our families are saving 43% more on average because of the ease of gifting. This is a feature of our service that is especially important to cash-strapped millennial families, many of whom have college debt of their own”

Collegebacker

You know how people say “what goes up must come down”. Well, when it comes to paying for a college education you can pretty much expect for the cost to continue going up and never come down. Some people start saving as soon as they get the news of a baby on the way, and some people start much later. However, as I found out, Collegebacker makes it easier to save for college. Its never too early or too late to start saving for the road to college. In fact, you can start a 529 plan for someone who is in college already.

Hope this helps make it easier to start saving for college. Happy savings, TaLis

*(as of the date of the Brochure on Collegebacker website)

Some graphics made with Canva.

Leave a Reply

Your email address will not be published. Required fields are marked *