The best time to pay for your kids college tuition is not when they are going to college. I know that seems kind of counter intuitive, sort of like how eating more times per day can help you lose weight. No joke, look it up.

So when is the best time to save for your kids college?

When they are born (or before). A small investment when they are born will do wonders for their college costs in the future. For example a $5000 investment at birth would pay for all of an average state school tuition when they are 18. Thats assuming an 11% return which is not too much to ask for, since the stock market has averaged that since the dinosaurs roamed the earth (or so they tell me).

But ahhh what if there is a recession when they get close to college age?
There is something that is excellent to use for this, and its called an age-based 529 plan. Its basically a plan that adjusts from being very aggressive in the beginning to conservative as the child becomes closer to their college years. You pick the year they should start college, and the plan does the rest. Its basically just like a retirement plan: you want to start aggressive and slowly move toward conservative.

Should I use an age-based 529?
I personally would say no since I hate paying mutual fund managers to do what I know I can do just as well as they can (oh boy here comes the hate mail, I can feel it). But if you want someone else to manage it for you, its worth considering.

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