Toddler

Know what makes me hyperventilate? Thinking about paying for my son's college education someday. It's getting insanely expensive, like maybe-I-should-be-a-banker-instead-of-a-writer expensive. Will I be able to provide my son with a quality education -- no matter where he wants to go? Will I have to take out a loan? Will he?

I would worry more, but one of the first things we did after my son's birth was set up a 529 savings account. Thanks to some seed money from my grandmother -- thanks, Grandma! -- we got started right away. And we've been adding to it, little by little, ever since. Here's why I think a 529 should be a priority for every family.

1. Interest. You know how this works: The longer you save, the bigger the money grows. The bigger the money gets, the faster it grows. It's a beautiful thing. But it won't really work if you start the 529 when your kid is 16.

2. Tax savings. Some states offer tax deductions on a 529. You have to remain in that state, though.

3. More tax savings. Unlike many other savings accounts, a 529 is a tax-free investment for the most part. You can't do anything funny with the funds. It really does have to be spent on your child's education. But for the most part it's untaxed.

4. States may match. Some states offer matching funds for a 529, usually for in-state schools.

5. It's flexible. Say your child isn't academically inclined. You can use the 529 funds you saved for vocational training instead. You've still invested wisely in your child's future.

6. Save as much or as little as you want. Some plans have limits per fund, but you can open as many 529 funds as you want to. And if you can just manage a tiny contribution every month, that's possible, too. It's better than nothing, and it adds up! I have our account set up with automatic payments every month.

7. You can pre-pay tuition. You can lock in tuition prices at certain universities and colleges instead of just watching those tuition prices rise, year after year.

8. High expectations. My son knows we have a college savings account set up for him, and I think that tells him that we care about his future, that we value education, and that he is expected to take his studies seriously.

Have you started a 529 fund for your children's education?

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