As a parent, you realize how much time flies.  There are some stages in our childs’ lives we want to go by quickly, like the sleepless nights with a newborn, or the dramatic teenage years.  Ultimately, these times do come to an end, and they will be ready for college in no time.  When that day comes, many parents are left agonizing about how they are going to pay for it.

The cost of college is increasing dramatically, and planning for it early can go a long way. According to the College Board, the average cost of tuition and fees for the 2012-2013 school year was $29,056 at private schools, $8,655 for in-state at public schools, and $21,706 for out-of-state schools.  The cost of attending college is growing at about twice the rate of inflation.  If you consider the fact that most degrees take 4 years (sometimes longer), coupled with the increasing costs, you could be looking at well over 6 figures per child for a college education.  And with many parents having more than one kid, it’s easy to get overwhelmed.  Given these statistics, what can you do?

First, you need to determine your personal philosophy on funding your child’s college education.  Do you wish to pay for all of it, a portion of it, or do you want them to take out student loans and pay for it themselves?  Sometimes, graduating college with a bunch of loans is a burden that is difficult to overcome for young adults entering the workforce.

If you decide you would like to help and can’t come close to covering the costs of tuition, you can still make a big difference the earlier you start. A savings of $50 a month can add up to a substantial amount by the time your child is ready enter college. This relieves some of the burden for them with student loans, and also minimizes the impact to your lifestyle.

For those who would like to help cover some or all of the costs, there are a couple of options to consider in order to put yourself and your child in a better position when the acceptance letter comes.  There are pros and cons to each, with some major ones outlined below.

There are many other ways to plan for college; these are just the most common.  Whatever vehicle you decide to use, there is one thing you should keep in mind – much like approaching retirement, your allocation should become more conservative as the child gets closer to needing the money.  You don’t want to have a child’s account completely invested in equities the year before they enter college and then experience another recession like in 2008, where the markets are down, and be forced to sell low in order to pay for school.  It is suggested that you revisit your allocation annually to make sure that you are not risking too much.  You want to have a fairly stable value to work with when you start pulling money out.

I recommend talking with your financial advisor about your philosophy and plans for your children early on in your child’s life, but it is never too late to make an impact in your child’s life, and any little bit helps!

Justin vanBlaricom leads HomeTown Investments . A Roanoke native and graduate of North Cross School and Roanoke College, he has extensive brokerage experience. An Infinex Financial Advisor, Justin works closely with clients to develop investment plans.

Investment and insurance products and services are offered through INFINEX INVESTMENTS, INC. Member FINRA/SIPC. HomeTown Investments is a subsidiary of the bank. Infinex is not affiliated with either entity.  Products and services made available through Infinex are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value.