Students can start at a community college at relatively low cost. After two years, a student can transfer to a four-year college and graduate with the same degree as a student who started there.

Recent trends, such as taking courses online or earning college credits before graduating from high school, can also help cut the total cost of a degree.

5. You may find it easier to pay for college when the time comes

It's great if you can start saving for your kids' college tuition 10 or 15 years before they need it. But the early years of raising children can be the most financially challenging. Parents' careers are not as far along, and one parent may stay home full or part time. You may be just getting into a home or starting to invest.

There's a high probability the family will have more disposable income when the kids are older, especially if both parents plan to work full time then.

6. College is not the only route to success

One of the biggest reasons not to put all of your investing efforts into your children's education funds is that your kids may choose not to go to college. Will it be OK with you if they decide to pursue a career that doesn't involve college, or if they drop out to start a business? Don't put so much emphasis on saving for college that you unintentionally create a conflict if your kids choose to do something else.

A child who reaches age 18 without a college fund can still get an education. Here are two examples:

  • Steve was the third of five children, and although his parents encouraged their kids to get an education, they couldn't afford to help pay for it. After Steve graduated from high school, he spent a year working in a furniture factory. If he hadn't wanted to go to college before, a year of mind-numbing labor would have persuaded him to sign up. He saved his money and then went to community college for two years while working part time. He transferred to a state university and graduated with a business degree.
  • Jan started college with her savings and some help from her parents. Halfway through, she got married and had her first child. She has never returned to school -- not because she can't, but because she is too busy running her own business. She educated herself about running a business and continues to keep up with industry trends and practices.

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Steve and Jan are successful, financially and otherwise. They didn't let the lack of an advance college fund stop them from reaching success.

If you decide to set up education funding for your children, ask your tax professional about the options that will give you the most flexibility and the best after-tax return for your situation.

Remember to pay attention to your own overall financial picture first, however. It's a good idea to keep some investments accessible for projects such as paying college tuition, but designated college funds are not the only way to go. Whatever your family's needs may be in the future, the best way to be sure you can meet them is to put yourself on the right track for all your financial goals.