Get Smart: Financial preparedness will pay off

You may find it hard to believe that the tiny person about to be born will be headed off to college before you know it. You say you have enough to worry about just buying the crib and the car seat? Odd as it sounds, the key to not worrying about finances, especially college savings, is to begin saving now.

The cost of a four-year public college education 18 years from now is estimated to be about $100,000, according to Smart Money magazine. A private education will run about $193,000, and for those who dream of the Ivy League, be prepared to shell out around $280,000.

Don't be overwhelmed by these figures. If you save regularly, slow and steady, you'll be surprised how much you'll have on hand when the time comes. And don't forget that many students qualify for financial aid, which can be applied to a hefty chunk of school costs.

There are a number of ways to invest the money you save. There are state-sponsored prepaid tuition and education savings plans, plus education IRAs that can be used only for schooling. You might even consider setting up a trust.

Before you invest, you have to figure out how to save. In addition to the costs associated with having the baby, you may be taking considerable time off from paid employment. Or you may be planning not to work at all while your child is young. Now is the time to tighten the belt.

What is the first step to saving and investing?

While you're preparing to have a baby, your creditors should be preparing for a zero credit card balance where you're concerned. Stop using credit cards now and make more than the minimum monthly payments on existing balances. Develop a plan to pay off credit card debt. Think of credit cards as something to use only in emergencies.

If you're tempted to spend now in order to be ready for the baby, talk to an experienced mom. You'd be surprised at the number of items you don't really need and the number of things you can buy second-hand. You don't need to go over the top buying a snowsuit for $75 that will last, at most, four months.

Being a parent definitely involves some sacrifices in terms of time and money. If you're prudent about your spending and pay down your debt, it will pay off with peace of mind and a savings base in the future.

Saving: Is it possible?

The answer is yes. You just have to look at how you spend money. If you've been eating lunch out every day, consider the brown bag. Five dollars a day saved on lunch is $100 per month. Extras like the morning cappuccino add up, too. Take a look at your check register and see how much money the dry cleaner has been claiming. You can iron shirts, hand wash sweaters and buy some clothing suitable for the washing machine.

By developing thrifty habits now, paying down debt and saving, you'll move closer to having enough money for your child's education and the other goals you want to achieve.