How you save and invest for your child’s college education depends on how old your child is now, your overall financial situation, the amount you have to invest, and the level of investment risk you can afford.

Once you've got your plan set, review it regularly to incorporate new information about college costs and tax-advantaged ways to save for college.  If you have more than one child, set up separate college funds to keep the investments appropriate for each one's age. 

Here are some general suggestions based on your time horizon:

Newborn to Age 8.  The sooner you start to save, the easier it will be thanks to the power of compounding. For example, suppose a family wants to build a fund of $50,000 to partially pay the cost of public college for their six-year old child. 

If they start saving now, for example in a tax-free 529 college savings plan that earns a 6% average annual return, they'll need to put away about $238 a month over the next 12 years.  If they put off saving until their child is age 12, they'll need to save more than twice as much a month to reach their goal - about $579.

At this early stage your goal is to try to keep pace with the increase in college costs.  With ten to 18 years until freshman year, financial experts generally recommend that you stash some of your college savings in long-term growth investments, such as a diversified portfolio that includes stock mutual funds.  While stocks are volatile over the short term, historically over the long run they have significantly outperformed other types of investments.

Ages 9 to 13.  In the early years of this stage with about ten years to go, you may still want to consider long-term investments. But because you have a shorter time frame, especially as high school approaches, you should generally begin to decrease your college fund’s risk. 

Consider mixing in investments such as short- or intermediate-term bond mutual funds, U.S. Savings Bonds, Treasury notes, short-term Treasury zero coupons, or CDs/share certificates. That way all your money won't be tied up in volatile investments that could lose value just when you need to cash them in.

These years are also a good time to help your child become a regular saver, responsible borrower, and wise consumer. Start by giving your child a weekly allowance, helping him or her open a savings account, and providing opportunities to earn extra money by doing household chores beyond regular responsibilities. 

Ages 14 to 17. At this point, your top priority is to keep your college fund safe and available for upcoming college bills.  So continue to move your money out of stock investments into shorter-term savings and investments with maturity dates staggered to match your annual college bills. 

Consider CDs/share certificates, Treasury bills and notes, short-term Treasury zero coupons, and money-market funds.  Put new savings into these shorter-term vehicles, too. 

If your college fund is coming up short, now's the time to consider major cost-cutting moves. At the same time, start looking into financial aid and keep up-to-date on the annual changes in the rules and deadlines.

During these teen years also consider giving your child a share draft/checking account, debit card, and perhaps a low-limit credit card. High school is also the time to begin discussing college plans.  Specifically, talk about what costs will be your child’s responsibility and the options for coming up with this money.

Ages 17 to 18. Now that freshman year is approaching, help your child evaluate his or her borrowing plans and future ability to repay. If you're the one doing the borrowing, take a close look at your repayment ability, especially if you're closing in on retirement. And before you apply for a loan, check your credit reports to make sure they’re accurate.

Article is for educational purposes only and is not intended to provide specific tax or legal advice. For answers to tax questions, please see your tax professional. For legal questions, consult an attorney.

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