Want to save for college, but not sure what type of account to use? State-sponsored 529 plans should definitely be your first choice. You don't have to pick one from your own state, but tax incentives might encourage you to do so. If your state doesn't off good tax incentives for colleges savings, then look for the plan with the lowest fees. Kiplinger's gives you an excellent overview of your options, as well as a state by state run down.

These state-sponsored plans can give you shelter from both federal and state income taxes, as well as give your child's grandparents a good way to chip in for their grandchild's education. In fact a grandparent can contribute up to $12,000 a year without having to worry about federal gift taxes (a couple can contribute up to $24,000 without gift taxes). If one grandchild decides not to go to college, just switch the account into the name of another child that wants to go. The money in the fund grows tax-deferred and as long as you only use it for qualified educational expenses you don't ever have to pay taxes on the gains.

You also don't have to worry about saving too much. The federal financial-aid formula assesses parent-owned accounts at 5.6%, while student savings can be assessed a whopping 20%. But, if you want to avoid taxes you must use the funds for qualified education expenses, so you don't want to save more than you think your child will need for college.

Okay, I admit it somewhat sheepishly, I send my kids to private school. It's easy to justify since I live in an urban neighborhood where the district public schools just aren't all that well-regarded. And man, my kids' elementary school is nice. Large, sunny classrooms, awesome teachers, great facilities and "specials" galore like gym, art, music, foreign languages. The kids love it.

There's only one problem. The place is expensive. And my husband and I struggle to scrape together the cash each year. It is a large percentage of our income, making those little extra charges incurred at public schools (See "Top Five Most Annoying School Costs") like fundraisers and pricey class photos, seem like chump change.

I can forgo the larger apartment, flat-screen TV and the new car. But what really worries me can be summed up in one word: College. We have lots of friends who do send their kids to public school. Their kids are doing just fine -- and better yet -- the parents are actually setting money aside for their college tuitions!

Sure, we set up a 529b plan for my oldest daughter, and it is quietly and slowly growing these days -- even without funds being added each year as we intended. And I keep meaning to set one up for my second child. I will someday, too.

I hope it will turn out, as the principal of their school asserts, that the kids are getting such a great educational foundation that spending so much money on elementary school will make sense in the long run. Ripping them out of a school they love certainly doesn't seem like a good choice right now.

And I wonder, if we hadn't chosen that expensive school, would I really have saved a bunch more for their college? Maybe a little more. Or maybe I'd just have a nicer apartment, car and flat-screen TV.