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While saving for college is hardly as simple as 1-2-3, experts say it starts with 529 savings plan. These funds should be opened as early as possible, preferably at the child's birth.

"As soon as you get that social security number, you need to start saving for college," says President Alan Kahn of the AJK Financial Group.

The 529s come with a number of tax benefits. In New York State, contributions of up to $5,000 per person per year, or $10,000 for a married couple, can be deducted off state income taxes. Since the money is invested in mutual funds or money market accounts, any accrued earnings are also federal and state tax-free.

While it's never too late to start a 529, Kahn says once the child is a teenager it's likely too late to reap the full benefits.

"As long as you have that time frame of at least a good five or six years then it makes economic sense," says Kahn. "It really doesn't make economic sense if you have a shorter time frame because in the event that we have a market blip like we've had in the last year you really need the time to recoup."

Parents of current high school students learned that lesson the hard way.

"We saved a lot but in this latest financial crisis we lost a lot so it's gonna be a bit of a struggle but did you have a 529? Yeah I did, now its like a 5-9," says parent Winston Wohr.

"It's very important to review your portfolio on a continual basis and as your child gets closer and closer to college you need to make your portfolio more conservative to preserve that portfolio," says Kahn.

Even those who do not have extra cash to set aside every week can still build up a nest egg. Relatives can be asked to make contributions to the savings plan rather than buy birthday gifts.

Parents can also set up a Upromise account, a free service that allows people to earn money for college by purchasing items from participating companies. They also offer credit cards to accumulate bonus points.

"You can set up automatic sweeping, so when you reach $25, you'll be swept automatically on a quarterly basis from your Upromise account into your 529 plan," says Upromise chief marketing officer John Ward. "You can also just request a check when you need it for college expenses, tuition books, whatever you need."

Regardless of where the money comes from, once it's in the 529 saving plan, it can only be spent on higher education. If your child chooses not to go to college, the funds can be rolled over to another sibling, niece, nephew or grandchild. But if it's withdrawn for any reason other than college, you will have to pay a penalty.