Q I am a recent college graduate with a fair amount of student loans that I consolidated into a 2.8 percent interest-only loan. How does this affect me if my principal balance doesn't start to decrease until 2011?

Dan Toellner, Minneapolis

A Locking in a fixed rate for the life of your student loans will save you a considerable sum.

This is a common loan repayment plan that is offered by many consolidation companies and is designed for recent graduates.

The best way to lower your principal balance is to pay more than the required monthly payment. Contact your lender and find out how extra payments are applied. Lucas Bucl (age 25)

Q My husband and I are both 30 and have a 1-year-old child. Should we be trying to make non-retirement investments at this stage in the game, or is focusing on a 403(b) and/or a 401(k) enough? Also, we are having a hard time imagining some goals, such as a bigger house. What's a realistic way to save?

Julie, St. Paul

A The short answer is, yes, invest in both retirement and non-retirement accounts.

Your questions raise other questions. What is "enough?" If you can contribute the maximum amount to your retirement plans and still contribute to non-retirement accounts, you should do so. If not, this is when you must balance short-and long-term goals.

You might want to scale back on 401(k) contributions (however, be sure to contribute enough to earn the employer match, if applicable) and invest in a non-retirement account. You can establish systematic deposits to non-retirement accounts from your paycheck. This will allow the funds to be somewhat "out of sight, out of mind" while you save.

Bottom line -- pay yourself first.

Kristin Hannemann, certified financial planner (age 30)

Ka-Ching's financial experts at Edina-based Accredited Investors Inc. can be reached at kaching@startribune.com.