During your teen's junior year of high school, draw up a checklist of potential financial sources and groups to contact. You are looking for any company or organization that offers a scholarship, a grant and/or has an awards program.

You can also build a list of potential scholarship possibilities based on your child's academic abilities, talents or special considerations. In particular, focus on groups where your child might have an extra edge, such as:

• Ancestral and ethnic groups
• Athletics, cheerleading, drama
• Community programs
• Employers
• GI or veterans programs
• Local businesses
• Minority organizations
• Professional or fraternal organizations
• Religious affiliation
• Societies for students with specific disabilities
• Unions

Scholarships that don't reduce any other financial aid award are best. Each scholarship has its own deadline for application, so don't wait until the last minute. Procrastinating could literally cost you hundreds - if not thousands - of dollars since money may be given out in the order in which applications were received. You can apply for most scholarships before your child has decided on a school.

Smart Money Caution: If your teen receives scholarship money, make sure he or she keeps receipts and good records of how the money is spent. Any scholarship money that is used for room, board or personal expenses is generally taxable income to your child. Only money used for tuition, course-related fees, and books is tax-exempt.

Learn more college savings tips by clicking here!