A 529 college savings plan is a great deal that has gotten even better. You may open one in any state, there are low minimum investments and couples can contribute up to $24,000 a year without triggering gift-tax issues.

Money grows tax-free if it's used for college expenses. Some states offer a tax deduction too. Recently, many plans have been lowering costs. In addition, as a result of recent legislation, 529 funds won't count against your child's chances for financial aid.

Key stat: 72% of parents think their kids could get merit aid - only 28% of kids actually do.