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Whether their child is still in diapers or eagerly filling out college applications, many parents share one concern about their child’s entry into higher education: How on earth are we going to pay for this? In this article, we’ll try to demystify the world of college costs and set you up to pay for college without selling your soul – or your house.

First, we’ll offer some guidelines about college financing. Many parents hear stories of elite universities where annual tuition tops out at $50,000 and immediately decide that their child will be enlisting in the Marines at 18, thank you very much. But the best rule of thumb is to think of tuition in thirds: Families should expect to save or pay cash for a third of their child’s college costs, borrow a third, and secure grants-in-aid (scholarships) for a third. Some ambitious families will plan to save a third, pay a third out of their income, and secure the last third from their child’s university, either through loans or scholarships. The other rule of thirds is a timeline: families should expect to be ready for college before by saving, during by spending out of their income, and after by paying down student loans.

The rule of thirds is a great tool for parents who start saving when their children are in grade school, preschool, and even, yes, still in diapers. Putting away just $10 or $50 per week (or per paycheck) when a child is two or three will add up when a child is ready for college at 18. Parents with young children are poised to take advantage of state 529 plans, tax-advantaged investments vehicles designed to help parents save for college. Medium-risk mutual funds are also a good choice when children are in elementary school, but remember to move the money out of the market when your child hits high school. Money earmarked for tuition in three or four years should be protected from dips in the market in a certificate of deposit or municipal bonds- or, better yet, cash.

But what if you didn’t start saving until your child started thinking about college? You’ll have to play catch-up, it’s true, but you can still find a way to finance college. You might not know that most families rarely pay the “sticker” price for college tuition. Colleges and universities will consider a family’s financial circumstances and a student’s talents and strengths. For instance, although Harvard University lists annual tuition at more than $45,000 per year for an undergraduate, the school waives tuition for admitted students whose families make less than $60,000 per year. Harvard also works with families who make less than $120,000 to ensure that those households pay only 10% of their annual income in education costs. Many other elite schools have similar policies, meaning that talented students from middle-class schools can often attend Ivy League universities for less than the cost of a public college.

Speaking of public college, don’t discount these and their even-more financially sound cousins, community college. Two years at a community college can save families nearly $100,000 in tuition- and even more in living expenses if the student lives at home. And the best part? Once your child transfers to the school of her choice, she’ll earn the same credential as her peers who started as freshman. The only real difference will be in your bank account.