TODAY   |  August 30, 2012

What’s the best way to save for your children?

In a special back-to-school edition of Money 911, personal finance experts Jean Chatzky, David Bach, and Sharon Epperson tackle viewers’ financial dilemmas, suggesting a way to save for your kids without putting money into an educational account.

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This content comes from Closed Captioning that was broadcast along with this program.

>>> back now with "today"'s money questions. jean and good morning, gang. you guys have a tough act to follow. here we go. let's get right to it. we're going to go to skype first to jennifer from illinois. what's your question for our panel?

>> good morning. it's time for me to start paying back my student loans . so what to pay down first, my interest or my principal since i know there's a tax deduction for the interest. and also if i have to go into deferment, will that hurt my credit score ?

>> so, jennifer , the way it works is when you send a check to your loan company, the money goes first to late payments if you have any, then it goes to interest and then it goes to principal. if your loans are federal loans, there a lot of choices in payment plans. the ten-year plan is your best option to getting out. that's the standard repayment plan. however, if you need to defer for any reason, you want to make sure that if the interest is not being picked up because your loans are subsidized that you at least make that payment on the loan to just stay on top of it and it will not hurt your credit rating .

>> all right. thanks so much, jennifer . appreciate the question. next we're getting a question on our facebook page. christina from easton, maryland writes "i have three children, ages 10, 9 and 7. i want to know the best way to save money which will get the most gain without putting it into an education al -- if she just wants to use a regular investment, the most important thing is saving the money automatically. with three kids she needs to be saving at least $500 a month. it's hard to hear right now but it has to be saved automatically from your checking account going right into a mutual fund every single month and i'd break it up so it's $250 every two weeks. if i wasn't going to use a 5 to 9 plan, i'd use a balanced mutual fund , 60% stock. i would use the van guard balance fund, low-guard, conservative, the returns have been over 7% for the last ten years and over three years have been over 13%. if you're worried about a balance fund, i'd look at a target dated fund at 225, right around the time you're continuing to give --

>> but you won't get the flexibility.

>> the roth ira . let me just make a plea for the roth ira . she's probably worried about retirement at the same time as college. the report ira, if you put the money in there, you get the ability to use it for college or retirement.

>> good point.

>> let's get back to skype again. we have a question from boulder, colorado and sydney joins us. good morning to you. i know you're a college student there. what do you have for our panel here this morning?

>> through my university e-mail, i receive advertisements from companies that pay decently for answering survey. they all have a one-time fee. how do i know if they're a scam or not?

>> that fee is a red flag . i would be wary of these companies that say you make money filling out surveys and then they pay a fee approximately many times, maybe it's worth looking into, but it's not going to give you the type of money you'd want from a paid job. if they want your personal information, social security numbers , all those are red flags . if you want to try to make some money and get a part-time job, i and also we're talk about scholarship money. you want the free money first. you probably signed up to a site like you can get linked to internships and job opportunities in your area.

>> sydney, i'm sure as your parents say all the time, if it sounds too good to be true, it probably is.

>> thanks so much. appreciate it.