BEND, Ore. (CNN/Money) - 529 college plans are, in most cases, a no-brainer for families hoping to save for spiraling tuition costs.

Investments in 529s, which are sponsored by individual states, grow tax-free, and withdrawals are exempt from federal taxes (at least until 2010, when Congress has the option of extending the break). And in many of the 49 states offering 529s, residents can deduct their contributions to their own state's program for additional savings.

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Over the past three years, not surprisingly, assets in the plans have grown ten-fold to $30 billion, according to Joe Hurley, founder of Savingforcollege.com.

But for all the benefits, such accounts may not be the best place for your money. Before you invest, ask these questions.

Saving for college is important. But it's not as important as building emergency savings, paying down excessive debt and saving for retirement.

"You need to make sure those pieces are locked in place before college even comes in," said Brian Orol, a certified financial planner in Raleigh, N.C.

For starters, you should have at least three months of living expenses in an account that's accessible.

Then, consider your debt load. Ideally your total monthly long-term debt payments -- including your mortgage and credit card payments -- shouldn't exceed 36 percent of your gross monthly income.

Paying off credit card debt should be a top priority. After all, there's no guarantee that you'll make a 15 percent return on your investments, but you can be sure of a hefty "return" when you pay off high-interest debt (and abstain from charging more).

Your next concern should be retirement. "You can borrow for college, but you can't borrow for retirement," said Orol. (Click here to calculate what you need to save for retirement.)

If your employer matches contributions to your 401(k), contribute at least enough to take full advantage of that match.

For all their tax advantages, 529s could have adverse effects on financial aid.

Although financial aid offices consider the assets in 529s parental assets, they are expected to treat earnings on 529 withdrawals as students' income -- which is typically assessed at a much higher rate than parental income when financial aid officers calculate how much a family can afford to spend on college.

"Usually you can't get both financial aid and tax savings, so you need to decide which is most important," said Ray Loewe, president of College Money. "First and foremost, we do a financial aid test on all of our clients."

As a rule of thumb, said Loewe, couples earning less than $80,000 have a good shot at qualifying for financial aid at a private school, while couples who make more than $120,000 have less of chance for need-based aid.

Of course, many factors impact your chances for financial aid, including how many children you have and what colleges they hope to attend.

And just because there's a good chance you'll qualify for financial aid doesn't mean you shouldn't save at all. After all, the majority of financial aid comes in the form of loans, not grants.

Loewe recommends that families likely to qualify for aid start saving outside a 529 -- typically in a portfolio of taxable mutual funds in the parents' names. Down the road, you can move into a 529 plan if your situation changes.

If you decide to go ahead and set up a 529 plan, keep in mind that you don't have to stick with your own state's plan.

In fact, you may find that the investment choices are better and the expense ratios are lower if you invest in another state's plan. Among those states with low expenses ratios and good investment options are Iowa, Nevada and Utah. (See "529 Guide".)

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When certified financial planner Barbara Steinmetz evaluates states' 529 programs, she looks at the available funds, the expense ratios, contribution limits and the ease of the application process. She recommends comparing plans at Savingforcollege.com.

"Looking at rates of return has been a little difficult because the track record is not as lengthy," she added. "Often I try to look at the fund family's returns."

Of course, you'll also want to consider the value of your state tax deduction, if any. Depending on the size of that deduction, it might be worth it to invest with your state, even if the plan charges a little more. (Manulife Financial has a state benefits calculator.)

If you can get your state deduction and a quality, low-cost plan, well, that's a no-brainer.