College costs may seem overwhelming. Tuition rates continue to increase at double the rate of

College costs may seem overwhelming. Tuition rates continue to increase at double the rate of inflation. How is it possible to afford to send a child to school, especially an expensive one? How can you possible save enough money in time? Fear not, there are some basic steps to saving for college that make this important goal attainable.

Do your research

Before beginning the budgeting process, it helps to understand what you need to do and how many resources are available to help. A college education is an important right of passage in the U.S. The government, colleges, and many other organizations provide loans, scholarships, advice, and other resources to make the goal achievable. Start from the beginning and make sure you know what resources, loans, aid, and savings plans are available.

The budgeting process begins with a good estimate of the total college cost. The estimate should include tuition, room and board, personal expenses, and emergency money. Calculate the costs for the total number of years expected in school. Estimating the total expense is not easy, especially if college begins in 18 years. It's hard to know whether tuition will keep rising as fast as it has in the past. The best bet is to craft a conservative estimate as a starting point. As trends become more apparent, it's easier to back-off saving rather than try to catch-up. Try using one of the very useful cost-estimators on the Web.

Once you get a good idea of how much everything is going to cost, it helps to create a plan for meeting your savings goal. The bottom-line is to save as much as possible so that you don't need to take out numerous loans, which may be more expensive in the future. Saving money for college expenses will pay-off in the long run. There are several designated college savings plans with special benefits and incentives. You do not need to save for the entire cost of college. The more you save, the better, but loans and aid are available to help. Figure out how much money you can save on a monthly basis, and start there. Then set up a savings account and create an auto-deposit plan.

Part of your savings plan should include tax-advantaged investments such as a 529 savings, Coverdell account, or prepaid tuition plan. These investment vehicles are specifically designed to help save for college and provide additional benefits from a regular savings account. Specifically, money in one of these savings plans grows tax-free, and it can be withdrawn tax-free when used for education costs. Also minimize taxes wherever possible and take advantage of gifting to your children.

Grandparents and other relatives can help as well. Consider college savings gifts in lieu of other presents. Grandparents using a 529 plan to save for a grandchild's college education can open an account in their names if they want to maintain control and retain the ability to change the beneficiary to another grandchild. Grandparents can also make a contribution into an established 529 account. For gift taxes, the grandparent makes the contribution and can take the five-year averaging election.

If you do not have any significant experience investing, or if you would like some help with creating a savings plan, figuring out costs and a budget, or reviewing how college expenses fit into your family's total budget and savings plan, look for professional help. If you have an account with a bank or other financial institution such as a mutual fund company or brokerage, they have experts who can assist you with this process.

Diversify between taxable and tax-free investments, and grow your investments in-line with financial need. A good investment strategy utilizes different types of investments as the child ages and the savings grow. The funds need to be available when your child enters school. Early on, when your child is young, you can take on more risk to try to earn higher returns with equity-focused funds. As the child nears college age, say 15, begin moving some savings out of equity investments and into lower risk investments such bonds savings certificates where they will still grow, but at a safer, more conservative rate. Consider certificates that mature annually as college begins.

If you maintain a fully taxable investment portfolio and a 529 plan, consider concentrating the growth portion of your investments in the taxable accounts and the income-producing portion in your savings accounts. Growth stocks and low-turnover equity mutual funds are already tax-efficient and can take advantage of low capital gains rates, while income-producing investments are less tax-efficient and can benefit from the tax shelter of a 529 plan or ESA. Capital losses in taxable investments can also provide a tax benefit.

When in doubt, seek professional help from a financial planner or counselor. If you do establish a sponsored savings plan, the financial services firm managing the money can also provide advice.

You do not have to pay for 100% of your child's education. If you look at your total budget and realize that you cannot save as much as you would like, look to financial aid for help. Part of your college expense plan should include applying for financial aid. Many different loan and aid packages exist. Depending on your family's income, assets, and number of children in school, you should be able to receive help in the form of low-cost loans.

Another part of the budget should include research into possible scholarships and grants. Hundreds of thousands of scholarships and grants are available for qualified students. Scholarships and grants provide free money.

Part of the budgeting process should include a detailed look at paying off the loans and other aid. Students should consider how much money they will be able to contribute after graduation as well.

Savings programs, college costs, and investment returns regularly change. Keep abreast of current costs, changes to related savings plans and their tax-status, as well as your investment mix. Review your financial situation on a regular basis and make adjustments accordingly. Don't create a plan and expect it to work for 18 years without any changes.