Some parents have lost huge amounts of money by fooling around with their children's 529 accounts, which are designed to build college savings.

The key to intelligently doing a 529 plan is to take an age-based approach to it. Simply put, the level of risk of the investments should adjust as your child ages. Let's say your child is 2 years old. You'd want to have most of the money in stocks. But when that same child is just about to start college at the age of 18, the money should be in the most conservative investments possible. When you use an age-based portfolio approach, the mix of investments automatically adjusts every 2 years or so.

Clark has a daughter who is a sophomore in college. Her 529 plan made a little over 1% this year, which is basically like a savings account. His 3 year old, meanwhile, has a more volatile portfolio since he has time to make up any losses.

What if it's already too late for you and your teenager in college? Well, there are always inexpensive community colleges and in-state schools. There's no tragedy in spending a year or 2 at such an institution and then transferring to a 4-year school.

Clark actually went to what was thought of as an expensive private college. His American University bachelor's degree (1973-1976) cost around $2,400/year. When you adjust that figure for inflation, it's around $6,000/year. Compare that to nearby George Washington University in Washington, D.C., which costs some $50,000/year for tuition, room and board. Wow!

The penny-pincher believes that private college tuition will moderate. If the money is not there from 529s or to borrow, colleges can only charge what the market will bear. The era of galloping college tuitions is about to come to an end.

Meanwhile, if you're a parent, do not feel guilty if you can't give your child a free ride at Party Central U. somewhere. College should make you grow up and become more responsible, in addition to letting you gain a skill to make a living.