Vanguard has a really good education planning calculator.
Using that, I made very rosy assumptions in making our plans about the future, as in college is only going to inflate 1%/year (rather than 5% what most financial planners say), and that my investments are going to bring an average return of 9% year (rather than the presumed 6-7% they give you). Assuming we max out the deduction of $2k/year ($1k for each kid), I basically figured out I need to put $10k in seed money now and watch it grow over the next 18 years whilst funding at $1k each kid per year thereafter.
I put in the rosy assumptions specifically not to overfund the 529 accounts. I just throw the money in Total Stock Market Index funds. If it grows to pay 100% for school, great. If not, the money in my taxable will cover it, or they can go out and do what I did and pay for it themselves. If I slightly overfund or if my kid decides not to go to college, then I can change the beneficiary to another kid, my nephew, or even a grandkid.
I truly believe the rate of college inflation will decrease because everyone in my generation is butt-hurt with student loans and is swearing by not having their kids pay the high ticket price for school. The recent rate of inflation is simply unsustainable, and with innovations of online learning, etc., I just don't see that happening.
But even if I'm wrong about the future it is no big deal, because it's not like we are going to be short, we are just going to have to pay a little long term capital gains. I don't want the opposite to happen: overfunding the 529 account and be stuck with a massive 529 plan that I'm not using.
The money I put in the 529, of course, is money I consider "bonus." It's "bonus" as in I already have my 401k and Roth IRA's maxed out. This year, we will probably be coming into about $30k bonus in cash. Half of that is going to the 529s ($7,500 each), and the other half is going into my "early retirement account", a taxable account. I'll probably make up the $2,500.00 difference to the $10k "seed money" over the course of next year. Thereafter, it is just putting in up to the maximum tax deduction, and no more. The rest of the "bonus" goes to the "early retirement account."
The reason I am telling you all this is to show you that you can do your college savings in a way that works best for you. The Vanguard calculator comes in handy. I am a big state school advocate and not too keen on those fancy high price private schools. If fancy is something you want for your kids, though, then you can take a different strategy.
Also keep in mind that as your kids get older, the benefits of the 529 plan decrease as there are less tax savings on the smaller growth you will get. In other words, investing $10k now is going to see a lot of growth in 18 years. Putting $100k into a 529 when your kid is 16-17, though, makes little sense, because you are putting restrictions on your cash in receipt of only 1-2 years of growth.
Another consideration is gift tax, which applies to the 529. There is an annual gift tax exclusion of $14,000.00, which means you can give $14k and your spouse can give $14k to your kid every year without any gift tax ramifications. If you give more than that, then it may affect your estate/gift tax later on. I read that you can "front load" a 529 up to five years. Since this is not even on our radar screen, we did not look into it that much, but I believe that option is out there if you have a lot of money to spend.
Hope this helps.