If you're like most parents with young kids, opening a college fund is on your to-do list (right below joining a gym and scheduling a date night), but you haven't actually done anything about it. You've got some good excuses. Between caring for the kids and running the household, you barely have a free minute to check your e-mail. Your budget is stretched thin by diapers, baby gear, and, well, you name it. And the numbers aren't exactly encouraging: If college costs continue climbing at more than 5 percent annually, the price tag for four years at a public university will rise to about $105,000 by the time your baby matriculates -- and $275,000 if she goes to a private institution.
But take a deep breath. The fact is that few families end up paying the whole bill for higher education. Two thirds of undergraduates received some form of financial aid during the 2007-08 school year, according to the College Board, a nonprofit association of colleges and universities. A more realistic goal for middle-class families is to try to save about one third of the projected college cost, notes Mark Kantrowitz, founder of finaid.org, a financial-aid site. Direct aid, scholarships, student loans, and your income at the time your child applies for school can make up the rest.
Plus, if you start now you can build a sizable nest egg. "My advice is to contribute what you can as early as you can," says Jerry Cannizzaro, a certified financial planner in Oakton, Virginia. Even a small investment can pay off big-time when college rolls around (and trust us, it will happen a lot sooner than you think). Follow these steps to painless saving.