Spend a Little Here, Save a Little There

Who

says spending money and saving it are two different things? A new breed of companies is trying to convince consumers that shopping and socking away cash can, in fact, happily coexist. BondRewards, for example, lets you shop online at retailers like Target, Barnes & Noble and PETsMART and then recoup a small percentage of the purchase price in the form of U.S. savings bonds. Register at BondRewards.com, then click on one of the 150 listed e-tailers. Every time you buy something, a percentage of the total ticket gets kicked into an account; when you've got enough for a savings bond (they start at $50), it's yours. Other brands on board — most offer between 2% and 10% back — include Mikasa, Orbitz and Toshiba.

Some ventures encourage saving for your child's college education. BabyMint.com lists about 200 retailers that rebate money into either a Coverdell Educational Savings Account or a state 529 college savings plan. At Upromise.com, you get cash back into a 529 by registering credit, debit and grocery-club cards and then spending both online and at brick-and-mortar stores. At EdExpress.com, you can save for any education costs — not just college — but you are charged a $24.95 fee annually. No kids? NestEggz.com funnels rebated money into a mutual fund, individual retirement account or money market.

The downside? These plans offer the illusion that shopping equals thrift. "You're never going to spend your way into savings," says Gail Hillebrand, a senior attorney at Consumers Union in San Francisco. "You need a significant savings plan for your family, and this is not it." The amounts of money returned can be so small that if you're spending for things you otherwise wouldn't buy, it can easily negate the benefit.

And think about how you'll buy. If it's on credit and you don't pay your balance in full every month, you could be losing out. For example, the Series EE savings bond you collect from BondRewards carries a 2.84% interest rate, so unless you've got a real deal on financing charges, you're likely to hand over more in interest payments to your credit-card company than the government slips back to you.

Remember too that most of these rebate outfits also try to make money selling their own credit cards, enticing you with a little extra earning power and the chance to shop in actual stores. An extra piece of plastic in your wallet is hardly the way to greater savings. Still, if you can keep your head, these offers can work out to your financial advantage.