NEW YORK (CNN/Money) - You knew having children would be expensive. You just never guessed how expensive until you considered sending one or more of them to private school.

With median 2002-03 tuitions at day schools ranging from $11,650 for first graders to $15,000 for high school students (add at least $13,000 more for boarding school, according to the National Association of Independent Schools), you've got yourself a financial dilemma if you gross less than $200,000 a year.

After all, you still need to eat, save for retirement and maybe put away a few bucks for college. Oh, and don't forget those little expenses like the mortgage, insurance premiums, your taxes and car loans.

Yet, private school is on your radar. Perhaps you want your kids to have a name-brand education, access to the country's elite or learning programs that don't exist in public school. Or maybe it's just that your public school system offers more in the way of discipline problems than a top-notch curriculum.

Either way, you need to think hard about what you really can afford and what the long-term effects will be on your finances.

For some, financial aid is a must, but it's no guarantee.

The School and Student Service for Financial Aid (SSS) reviews parents' aid applications for NAIS member schools. The SSS then sends a report to the schools you're interested in and makes a recommendation as to how much the agency thinks you can afford to pay for tuition.

Several factors determine aid eligibility, said Mark Mitchell, NAIS vice president for financial services. They include your gross income, both taxable and non-taxable, and your assets.

Assets include home equity; business equity (if you own a business); equity in rental properties or vacation homes; checking and savings accounts; and investment accounts with the exception of your retirement nest egg. You will, however, have to report your current contributions to retirement accounts. Say parents report $10,000 in annual 401(k) contributions. SSS may conclude "they have the ability to put $5,000 in a 401(k) and $5,000 toward tuition," Mitchell said.

The SSS also considers how many children you have for whom you are paying tuition (college or otherwise); and how high the cost of living is in your area.

And generally speaking, he added, two families of equal size with the same income may receive different SSS assessments if one family's net worth exceeds $75,000 and the other's falls below that level.

While schools rely on the SSS determination, each makes it own decision on aid.

Even if you receive aid, however, you still may need to foot a big chunk of the bill. Only about 14 percent of students at day schools in 2001-2002 received need-based aid, according to NAIS, and the average grant was $7,980. That's a bit more than half the median annual tuition ($14,164) that year for 9th through 12th graders.

There are tuition-payment and loan programs that can help, but that's still money you'll owe.

One of the biggest mistakes parents make when deciding whether they can afford private school is failing to quantify how their other needs will be affected. "You cannot make these decisions in a vacuum," said certified financial planner Peter Traphagen, Sr.

He recommends, for instance, that parents calculate how much they think they'll need in retirement and figure how much they'll need to save annually to reach that goal, especially if they're thinking of cutting back on their retirement contributions to help make ends meet. (For help making projections, try the Retirement Planner.)

But just trimming your budget and boosting income may not be sufficient. If you wonder how other families manage, consider this: "Grandparents often step in," Traphagen said.

If you're fortunate enough to have parents who can help, here are three smart ways for them to pay, he said: They can give up to $11,000 a year to your children tax-free. Or they can give money up to any amount directly to the school without triggering the gift tax. A third option is to contribute to a Coverdell Education Savings Account (but your contributions and theirs can't exceed $2,000 a year).

Another option is to do a cash-out refi on your mortgage, taking advantage of historically low rates, Traphagen said. That may not be a bad idea if your house has appreciated significantly and you can handle the monthly payments without strain.

Borrowing against your 401(k) is another possibility if your plan allows. But consider your retirement goals. It can be very hard to make your regular pre-tax contributions on top of your loan payback. And because your balance will be reduced, it will compound more slowly.

You may think sending your child to private school will improve his or her chances of gaining admission to a top college. Not necessarily.

"A lot depends on the actual courses that are being offered and where you are relative to your peers," said Dr. Katherine Cohen, founder of IvyWise, a counseling service that helps kids get into college. Top colleges also look at "how many opportunities you've had in your life and how you've taken advantage of those opportunities," Cohen added.

So if your daughter is a B or C student at an elite private school, doesn't take many advanced placement (AP) courses and doesn't include extracurriculars such as community service, she may not fare as well as a public-school valedictorian who aced every AP class offered and volunteers at the soup kitchen.

The decision to go to private school is a pricey one. If you can't foot the whole bill for K-12 without putting yourself at financial risk, you might consider sending your child to private school for only a few years -- perhaps in high school -- and in the meantime consider sending him or her to public-school alternatives, such as magnet schools in your area.

Or, you might consider moving to an area with better public school.

For a look at some profiles of public schools around the country, click here.