With the costs of college plummeting through the roof, you must start saving for your grandchild's education as soon as possible. Although it's often the responsibility of the parents to save for college, many grandparents are taking the initiative to start a separate college savings to help with the overwhelming costs.

Buy savings bonds each year for your grandchild's Christmas and birthday presents. Although this sounds like a boring gift now, the child can appreciate this gift later on in life. In addition to the bond, you can give a small present to brighten the eyes of the youngster.

Create an allowance fund at your house for your grandchild. For every chore that the child successfully completes, put $5 toward his college fund. This works best for local grandparents who need help weeding, mowing lawns and doing laundry.

Help your grandchild organize her playroom twice a year. With all of the items that are no longer enjoyable for the child, hold a tag sale or help the child sell the items on such sites as eBay. Deposit the money from the unused toys into a college fund.

Encourage family members to also put money towards the grandchild's college fund. Grandparents can be influential, and aunts and uncles may want to help you contribute to the child's future education too.

Open a 529 college plan at your bank for your grandchild. You can contribute after-tax dollars, and you remain the account owner of this savings plan.