We home school through 8th grade, use a highly regarded local public charter school for high school, and Purdue University thereafter. We let our kids know that they will start their independent lives with debt if they want to attend a private college.
We encourage our kids to focus during high school on academics rather than work (and provide them with spending money, cell phones, car insurance, and access to an car), and the approach has paid off so far as the oldest three have full-tuition scholarships. Midway through college we provide a $5K vehicle as a gift, and we plan to provide cash college graduation gifts ($5K? not sure yet of the amount) to help them start their own households and to transition them to paying for their own cell phones, car insurance, etc.
I suppose the biggest spending decision we made in this area was for DW to quit her job and focus on the kids; however, that decision was as much about our own preference for that lifestyle as it was about the kids' educations. We never thought of the impact on retirement preparation of our spending decisions in this area. In general, we saved modestly for retirement and spent everything else. Our retirement savings strategy left us with only about 1.5 times annual income in our 401K at ages 48 and 52, so we would have had a late, meager retirement if our company stock had not become valuable and liquid. Sometimes it's better to be lucky than good!
All that said, as parents of five children, we generally have been wary of private school as a large expense that also fosters relationships with people who have the means and inclination to spend more heavily than we could afford.