Step 1: Start Early

If you have a few years before your first child graduates from high school, you'll be in much better shape to take full advantage of some excellent plenty of savings and investment options for parents of the college-bound.

The 529 Savings Plan is our favorite.  This investment account lets your money grow tax-deferred, then allows you to withdraw money to pay for qualified college expenses.

The Coverdell Education Savings Account (ESA) is very similar to the 529, except you can pick your own investments. The downsides are that you can only contribute $2,000 a year and there's an income cap.

Another savings option to consider is a State Prepaid Tuition Plan, where you make payments based on your child's age and the state covers your tuition bill.

For more details on these savings plan, see Our Top College Resources.

Next step: Get a Scholarship