A new 529 Savings Plan sponsored by a consortium of more than 240 private universities and colleges was launched several years ago. This pre-paid program is called the Independent 529 Plan and has the same federal tax benefits as state-sponsored 529 Plans. Under the Independent 529 Plan, you purchase tuition credits at current prices. This gives you the ability to freeze tuition at today's rate. As the cost of college increases, the plan will cover the difference between what you paid for the credit and what tuition actually costs when your child is ready to attend school. As with all prepaid tuition programs, the key risk is that your child may not want to attend one of the participating schools. However an incentive is that saving through the Independent 529 Plan does guarantee your child admission into any of the member schools.

We recommend that you check out the program by visiting the website You will want to review the list of participating colleges. This is definitely an innovative twist on the traditional 529 Plan. Website: http://www.independent529plan.com.

For many families the key to saving money is to cut unnecessary expenses. Here is a great exercise: Record for an entire month how much you spend. Write down every dollar you spend, including food, gasoline, clothes, and even going to the movies. At the end of the month, add up what's on your list. Can you tell where most of your money is going? What expenses are nonessential and which are luxuries? Do you really need that $3 cappuccino when you could make it at home instead? Does your family need to eat out that often? It may seem trivial but we bet you can find more than spare change to save when you carefully examine how your family spends its money.

One family we know noticed that they were spending nearly $300 a month on restaurant and fast food. When they switched to eating at home and doing barbecues when they wanted something special, they were able to add more than $3,000 a year to their college savings.

Given a choice, it is better to start saving for college when your child is 5 instead of 18. But don't throw up your hands in despair even if you have only a year or less to save. Because things like financial aid and scholarships are unpredictable, whatever you can save may be just enough to fill a critical gap. Also, every dollar you save could mean one less dollar you have to borrow. This will save you additional money in interest payments. When you think about it, each dollar you save is actually worth a lot more if it helps you borrow less. So no matter how soon you have to pay the first tuition bill, start saving money today.

As you have seen, there are several tools at your disposal to help you save for college. However, none of these are going to be magic. The truth is that saving for college means making sacrifices. Whether it's putting off a purchase or living more frugally, there is no avoiding the fact that when you save, you must put on hold certain desires and luxuries. It's important that the whole family is on the same game plan. Everyone needs to pitch in by saving, and they also need to know why they are saving. Ultimately, you are training your family to live on less—which is not such a bad lesson to learn.

The families who were best able to save were not only ruthless in their quest to cut family expenses, but they turned the process from a chore into a family challenge. They made it a game to see how much each family member could put aside as a contribution to their education fund. The best way to do this is to lead by example. Get excited when you do save. Share how much the family was able to deposit into each child's 529 Savings Plan at the end of each month. Create mini-rewards for reaching weekly or monthly savings goals. If you can turn the act of saving into a challenge, you will be surprised at how enthusiastic everyone can be.

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