Saving for college and retirement.

QA I'm a single mother with three kids age 10, 9, and 7. I have $5,000 to invest and $2,500 in a savings account that I add $400 to each month. I want to save for my kids' college costs and for my retirement. Any ideas?

H. Beasley

Via the Internet

It's hard to give you complete advice without knowing your age and your total financial picture. However, saving for your retirement must be a priority. Only you can make sure you have money for your golden years. If you do not have a retirement plan at your place of employment, you must address that first because you probably have 20 to 30 years left before retiring. You should open an IRA with $3,000 at the same bank you have your savings account. You can also open an IRA with a low-cost online broker, such as Ameritrade or ShareBuilder. Then set up a 529 college savings plan with $2,000. Select a growth index fund and an international mutual fund to invest in. With the $400 you're saving each month, contribute $250 of it to your IRA, $100 to the 529 plan, and $50 to your savings account.

As much as you may want to pay for your children's college educations, no single mother should jeopardize her own future to do so. You still have eight years to search for scholarships for your first child's tuition. If you start educating yourself now about how to apply for scholarships and loans, you should be successful, If you invest wisely, you may also have enough to help your children pay for their education without creating a burden on yourself. Remember: They'll be able to get a loan faster than you'll be able to replace your retirement savings.

Mail your money management questions to Ask B.E., BLACK ENTERPRISE 130 Fifth Ave., New York, NY 10011 or send an e-mail to [e-mail].