Few people question the value of a college education, but the cost is enough to break the bank for a lot of families. A student entering a public university in 2001 can expect to pay $33,880 on average for four years of education, while those attending private schools may face bills totaling $90,164. With the cost of higher education rising faster than inflation, parents of today's four-year-olds may face bills of more than $200,000.

Sure, the numbers are scary. But if you start saving regularly while your child is in diapers, you'll put yourself in a good position financially by the time your son or daughter is ready to hit the co-ed bathrooms.

But don't forget: the availability of financial aid, loans, and education credits and deductions means you may not have to foot the entire bill yourself.

Indeed, you shouldn't if you're short on retirement savings. As a parent, you might think your most important financial duty is to pay for your children's education. But you're wrong. Saving enough money for your own retirement is even more crucial. Your children have a lot of resources besides you to help feed the tuition monster, but no one is going to help you finance your golden years. And don't worry that socking money into a 401(k) will be held against you if you apply for financial aid. Formulas used to assess need generally don't consider retirement savings as an available asset when determining how much parents can contribute to tuition.

But putting too much money in your child's name might. Although it's true that a child's income is usually taxed at a lower rate than a parent's income, keeping funds in a child's name can reduce your financial aid package. Colleges use a formula for aid that assesses a family's need based on 5.65 percent of parents' available assets and on 35 percent of assets in a child's name or custodial account.

Expected family contribution to college bills Parents' income assessed up to 47% Parents' assets assessed up to 5.65% Child's income assessed up to 50% Child's assets assessed up to 35% Source: Savingforcollege.com and The Princeton Review's Paying for College Without Going Broke. Based on the federal formula used to assess financial need.

Next: Top 10 things