When you have your first baby, you join a club. The new parent club.

There are a lot of membership requirements. You must be adept at changing diapers. You must learn to function on little or no sleep. You must be able to prop your child on your hip while talking on the phone and making dinner.

And while you’re doing your very best just to keep your head above water, it wouldn’t hurt to plan for the little cherub’s future.

If you foresee college as part of that future, there’s no time like the present to start stashing cash for the occasion. But deciding on the best approach can be as perplexing as figuring out how to get baby to sleep through the night.

“Planning for college is actually a more difficult task than planning for retirement,” says Margaret Stenseng, a financial adviser and district supervisor for Waddell & Reed Financial. “We all know that at some point in time we want to retire, or that we want to be financially independent.

“But just because we have a child and just because we desire to have that child go to college doesn’t necessarily mean that he or she will.”

Plus, mom and/or dad have about 18 years to save for their child’s college, compared with 40 to 45 years to plan for retirement.

But that doesn’t mean parents should jump headfirst into opening a college fund for their 6-month-old. Stenseng says it’s crucial that parents’ financial situation be stable before they start gifting money to a dependent, Stenseng says.

After that, saving for higher education becomes what she calls a “crazy quilt.”

“It ends up being pieced together with assets and resources that can be best utilized for a family’s situation,” she says.

New kid on the block

The most recent and popular option in the college savings repertoire is the 529 plan. The state of Kansas sponsors one called LearningQuest; investment firms offer others.

These accounts have low initial investment amounts, high contribution limits – as much as $275,000, depending on the plan – and grow tax-deferred. In addition, when funds are withdrawn for qualified higher education expenses, they remain tax-free.

And because the plans define those expenses liberally, Stenseng says, money from the account can be used to pay for not only tuition, fees, books, supplies and equipment, but also reasonable room and board, both on campus and off.

Another benefit unique to 529 plans allows contributors to make five-year carry-forward gifts, which computes to $60,000 per student in a single year that’s not subject to gift tax. The donor then can make no additional gifts to the student during the next five years.

The down side, Stenseng explains, is that withdrawals for nonqualified expenses are taxable and subject to a 10 percent IRS penalty.

“Here’s what I tell parents: We never want to overfund (the plan),” Stenseng says. “It’s better to be short than over.”

Banking on financial aid

Alternatives to the 529 include the Coverdell Education Savings Account, which also grows tax-free and allows for tax-free withdrawals. It can be used to cover college AND K-12 education expenses, the drawback being that contributions cannot exceed $2,000 a year.

Stenseng says Roth IRAs and traditional IRAs in the parents’ names can be used penalty-free (but not tax-free) in some circumstances for a child’s education expenses.

And certainly savings accounts, CDs and bonds are other options to consider, perhaps even in combination with a 529 or Coverdell account.

“The challenge the consumer faces is that those are very low-paying types of accounts,” Stenseng says.

They’re also subject to taxes. But there are no restriction on how the money can be spent.

“There are advisers who say a good mutual fund, properly managed, will work as well or better than one of the college funds,” says Linda Guthrie, an independent financial consultant and organizer in Lawrence.

She also has known advisers who say saving for college isn’t necessary because of the scholarships, grants and loans that are available – all preferable alternatives to risking your retirement savings.

“But the drawback is that if your student doesn’t have grades that are high enough to get scholarships or if the parents’ income is too high for a loan, then the student could be in trouble,” Guthrie says.

Feeding the cash cow

If you decide a college savings plan is right for you, it’s best to get started as soon as possible. Because you’ll have a longer period of time to invest, Guthrie says, you can start contributing at a lower rate and then increase the amount you put in as your income rises.

“Also, any interest that is gained by those early payments is almost impossible to make up if you start late,” she says.

Guthrie also advises her clients, if possible, to have regular contributions to savings plans withdrawn automatically from their checking accounts. Or, at the very least, make that payment before you take care of other bills each month.

“That takes away the temptation to spend it,” she says.

Starting a college fund won’t be a realistic option for everyone, though. And Guthrie warns against launching an account you can’t afford.

“You can’t let the guilt trip about ‘How is your child going to go to college if you can’t save?’ get to you,” she says. “You can’t let that jeopardize your own future, because if that child wants to go to college badly enough, they will find a way.”