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It's not too late to plan ahead for your child's education. But since you're off to a late start, you'll probably have to make more sacrifices than if you had started sooner. You can't look back. So move forward, and learn more about what to do next.

What it costs to go to college

College costs vary largely and depend on whether you plan to send your child to a private or public college.

Annual College Costs 1999 - 2000:

Source: College Board

Click here for a calculator that helps you figure out how much you should set aside each month, based on your child's age and whether you intend to send him or her to a private or public college.

That's what it costs today. So if you're starting 10 years away from sending your child to college - those numbers will change a lot.

Assuming that college costs rise at an average annual rate of 4% over the next 18 years, the total cost of a four-year education at a state university for a child born today would be about $90,000, while the cost of attending a private school would reach $200,000.

Why begin now

Although assumptions such as the inflation rate and your investment return are upredictable, one thing is clear... the sooner you begin, the better.

You'll want to minimize your reliance on student loans. A $20,000 loan might not sound that much in return for a good education. But at a 7.5% interest rate, your child willl need to pay $237.40 each month for 10 years.

For example, if you've got an 8-year-old child and you want to send the child to public school 10 years from now, then you must set aside $347 per month. If you wait until that child is 13, then you must save $646 per month. Numbers for private school are more eye-opening. If you were to begin when your child is 8, you'd need to save $865 per month. If you wait until age 13 - $1,610.

These numbers assume an 8% investment return and 6% inflation rate. If your rate of return is lower, or college inflation is higher, then these numbers will have to be revised upward.

	When given enough time, even a small investment can become largebecause of the power of compounding. Here's how it works: When you invest your money, you can earn investment returns. Then over time, you can earn returns on the money you originally put in, plus on the returns you've already accumulated. As the size of your investment grows, you can earn gains on a bigger pool of money.

Where should you put your money?

Owning individual securities can be risky. If one stock or bond performs poorly, your whole portfolios could be affected. For this reason, mutual funds may be a better fit for you. Generally, mutual funds distribute money across many different stocks and bonds - which can reduce your investment risk.

Since you are getting nervous about whether you'll be ready to pay for college, one option available to you includes investing your money in mutual funds. Performance isn't guaranteed, but such investments may help you grow your money faster.

	In the process of saving for college, do not neglect your own retirement plan. If you have to make a choice between your own financial security and a child's education, remember that unlike college students, it is not easy to finance your retirement. Click here for more information about retirement planning.

	Saving for college vehicles
	What is a mutual fund? It's an instrument that invests in many types of stocks, bonds and cash - or a combination of all three. With a mutual fund, you can spread your risk among several investments, versus just one stock. What is a home equity loan? It's a loan that uses the equity in a home as collateral. Equity is the difference between what a home owner owes to the bank or mortgage company-and what the home is worth.