First off -- the advice to take care of your retirement first - is really good advice... and that's mostly because of that old father time issue... the kids have 10 or 12 years before heading off to college - and retirement has a longer horizon (I'm guessing here) and lasts far longer.
Secondly -- While it's a nice thought to save for two college degrees - it's impossible for an ordinary person to do so. My own first hand experience tells me that. It's about 30 to 40 GRAND per year for all the tuition and books - and living expenses and travel costs..... PER KID. So you'd need 300 GRAND saved in the next 10 or 12 years... That's 25 GRAND saved per year beginning today. Depressing I know.
In state schools are less... Mine went out of state - why? Because the in state schools didn't accept them. Why? Because they're busy accepting out of state students that pay double or triple the tuition. Of all the parents I know - one kid went in state.
So here's where I'd be using the savings teaching.... Which is how we did it. I always taught them that it was okay to spend part of the dough -- as long as they saved at least half of it. It's kind of a reward for savings - that they also get to have some fun along the way. No different than the rest of us. It's human nature. We NEED to have our car parts etc -- but we also recognize the need to save/invest. So depending on how old the they are - you can also begging to teach them about investing. I started that when they were in high school.
I'd bought Apple (AAPL) stock for Alex -- 25 shares @ $85.00... by the time he finished college it was in the 300's... he was really interested in the market by then!!
I had set up accounts -- for each child... but before they turned 18 - I closed them and sucked the money back into my own accounts. That way they had no control over it. It was going to be ME paying for their college regardless... so the separate accounts were just used to show them about investing. When Alex graduated and remembered that "he" had 25 shares of Apple... he then wanted the money! After all -- it was "his". I just looked at him (as fathers do) and said -- Really? Well -- I'll give you that dough just as soon as you pay me back for your college expense. I mention this episode because that's what happens when you "give them" something. They can add - but they can't subtract.
If I was to do it over again --- I'd have pooled the money... so it "looks like" more to them. And it would have bought more of "X" investment.. and I'd have made sure they were donating half of everything they got to it. Some parents choose to incentivize by "matching" dollar for dollar anything the child saves. Sadly though - there's not much employment opportunity anymore for high school kids like there was when I grew up. We could work at any fast food joint - the car wash - the gas station etc. NOW? No way. Alex did yard work at an apartment complex I own (he worked for the management company so THEY were the boss not me).
An interesting side note there on INFLATION. Alex made $12 an hour. A friend said -- wow -- he can't even afford gas! To which I said -- well... When I was his age I made $1 an hour -- gas was .25 a gallon so I could buy 4 gallons of gas for an hours work. Alex makes $12 an hour and gas is $3 a gallon... so he can buy 4 gallons of gas for an hours worth of work.
What we all know really happens (THEN AND NOW) is that "stuff" goes UP faster than our wages -- so if a guy was making $12 an hour... and gas shoots up over $4 a gallon.... now that's inflation.
By the way..... We chose to send our kids to private Catholic school... so we've spent one hell of a lot of money on our kids education. If I'd have saved all that money - including the college tuition... and invested if for them instead. They'd never have to work a day in their lives.... Kidding here. But it's not far off the truth.
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