There can be no argument that saving ahead to meet college costs is a smart decision. The earlier you start the savings plan, the more you'll have. Some parents start this fund when their child is born. That's not too early.

Special savings programs for parents, grandparents, aunts and uncles, other family or friends make great baby-shower gifts! Federal and state governments have a series of incentive-based savings programs that provide tax advantages to those providing the money.

Three popular approaches to college savings plans are

• periodic investment
• prepaid-tuition plans
• investment accounts with a range of risks from aggressive to conservative