As a parent, saving for college early should be a priority — not only to help your child, but also to protect your own finances.

The average undergraduate receives $8,970 per year in grant aid, or money they don’t have to pay back, according to the College Board. But after accounting for grant aid, families still have to cover college costs of $15,400 per year on average for in-state students at public four-year schools.

To help you and your child avoid taking out costly loans to cover that gap, save up — even just a little bit — starting from your child’s first years. Here’s how to do it.

Audit your finances first

Before setting aside money in your child’s college fund, evaluate your financial health. There are a few goals that are even more crucial to meet. Consider the following:

• Do you have a rainy day fund of at least three months of expenses? This can help out in a pinch if you or your spouse or partner loses their job. Money tied up in a college savings account won’t help if you can’t cover utility bills or groceries in an emergency.
• Are you overwhelmed by credit card debt that’s accruing interest? Work to reduce or eliminate it, perhaps while you save a small amount for college, simultaneously. Consider working with a credit counseling agency to set up a budget and explore your debt payoff options. This will help you avoid paying interest that could otherwise go to college savings.
• Are you saving for retirement? If your workplace offers a retirement plan and matches your contributions, save at least as much as your company will match. That way, you’re not losing out on free money. A retirement calculator, including the one offered by the Social Security Administration, can help you determine how much to save.

Save for college at every stage

Once you’re pursuing financial goals that will help keep your family secure, you’re ready to consider college savings options. If federal student loans aren’t enough to cover tuition, many families turn to private lenders. Remember, if you reach this point, you can apply to more than one and compare the offers to make sure you’re getting the best deal. These strategies, however, can help you keep overall borrowing to a minimum.

Birth to preschool

When your child is born, your best bet may be to open a 529 plan.

Similar to a 401(k) or individual retirement account, a 529 plan is an investment account that allows your money to grow over time and must be used for a specific purpose: in this case, education costs. States run 529 plans, and most provide a tax break on contributions. You don’t need to choose the 529 plan your state offers, but look to it first if it offers a tax deduction or credit.

You must use the money you save for qualified education expenses, however. Otherwise, you’ll pay income taxes and a penalty of 10% of your investment earnings on the nonqualified withdrawal. As of 2018, qualified expenses include up to $10,000 in tuition at elementary or secondary schools.

Elementary school

As your child grows — and, perhaps, as you start refocusing attention on saving for retirement — you can work toward both by opening a Roth IRA. It’s an individual retirement account that allows you to withdraw money penalty-free before age 59 ½ if the money is used for qualified higher education expenses.

The Roth IRA offers a lot of flexibility: You can use it to cover education expenses not only for your child, but for you, your spouse or your grandchild, too. Plus, of course, you can use the money for retirement and pay no taxes or penalties if you’ve owned the plan for five years or more and you withdraw money after age 59 ½. That means it can be a strong option if your child decides not to go to college or otherwise does not need money for school.

Middle school

When your child is in middle school, you can encourage family members to contribute to his or her college fund on birthdays and holidays. This is possible at any age, but it can be extra helpful as your child gets closer to college. Contributors can make a gift by check to 529 plans or use the specific online gifting platform that many 529 plans offer.

You can also involve your child in the saving process. If he or she receives cash gifts or begins to pick up jobs like lawn mowing or babysitting, encourage him or her to contribute a portion to college savings. Set a goal to save a certain amount by the end of the school year and plan to celebrate meeting that goal with a reward, like an outing with friends or a small trip.

High school

Once high school starts, use the government’s FAFSA4caster tool to see how much federal financial aid your child might qualify for. That can help you determine how much more to save before they graduate and where your child should apply to school based on your budget.

You won’t be alone in considering your child’s access to financial aid when picking a school. About 82% of parents said they’d prefer their child attend a less renowned college that provides grant aid over a higher-ranked school that offers none.

Begin hunting for scholarships early, and check in with your employer about whether it offers scholarships to employees’ kids. If there’s a gap in your child’s financial aid package and you must take out loans, prioritize federal loans — particularly those for students, not for parents — before private loans. Federal student loans come with benefits that can make payoff more manageable, including income-driven repayment plans and forgiveness programs.

Final thoughts

Saving for college is all about balancing multiple priorities at once. When you’re saving for retirement, maintaining a rainy day fund and covering regular and unexpected expenses, college might end up last on the list.

But avoid needing to play catch-up by starting early and choosing accounts that give your money a chance to grow. You and your child will benefit from your forethought, and you’ll get to show your child the value of long-term financial planning up close.

Joe Resendiz is a Research Analyst at ValuePenguin, where he focuses on personal finance and credit research to assist consumers. Previously, Joe specialized on public sector and infrastructure financing at Goldman Sachs. He graduated from the University of Texas at Austin with a BBA in Finance.