As soon as possible, says Yolanda Tam, an agent with the New York Life Insurance Company and a registered representative with New York Life Securities. It's never too soon to start. Teach your children the value of a dollar and of a good education, and share with them how much a good education costs. Get them involved in the planning process. If you give them an allowance, discuss setting aside a portion for their college education.
Some parents even allocate a portion to the kids' retirement plan.
Decide how much money you can set aside. Then select a strategy that will get you to that goal. Gifts to kids are tax-free. Savings bonds are very secure investments. Check the maturity date and yield, however, to determine whether the earnings will be enough to fund the child's education.