Finally, start saving.
Now comes the hard part: actually socking away the money. It doesn't have to be, though. Simply set up automatic contributions from your bank account or through direct deposit from your paycheck (check to see if your employer offers this service). "By doing it that way, and slowly increasing the amount you put in as your salary increases, you won't really miss it," says Cheryl Costa, a certified financial planner in Natick, Massachusetts. Maybe that's because before long you'll also see the money working for you: A $100 monthly contribution earning an 8 percent average return will add up to $48,000 in about 18 years.
It's also a good idea to solicit funds from your parents if they're in a position to help out. According to a survey by The Hartford Financial Services Group Inc., 65 percent of grandparents want to help their grandkids pay for college, and over half plan to donate more than $10,000. If your folks or in-laws have expressed interest in starting a college fund, gently suggest that they refrain from opening a savings account in your child's name (explain that it could hurt your chances for financial aid down the road). Instead, ask them to write you a check earmarked for your child's 529 plan or open a new 529 account with your child as the beneficiary (kids can have multiple accounts in their name).
If they haven't mentioned it yet, no worries. They're probably too busy taking baby pictures or buying little gifts for every visit. So feel free to bring it up, tactfully. "When they ask what your child needs for a birthday or the holidays, say, 'A check for her college fund would be terrific,'" says Costa, who went so far as to ask her parents to sign up for a Fidelity rewards credit card that links to her kids' 529 accounts. Between her spending and theirs, they've accrued about $8,000 toward Matt, Eric, and Christina's education.
Once you get going, you'll find that your college savings account can grow even faster than your child. And when diapers become a thing of the past, you'll be glad you planned ahead.