Rose Kelly, 26, divorced mom of Gerritt, 5, and Bradley, 3, scrapes by on her $31,600 salary as a dental assistant.

What she has

A '97 Ford Escort that's paid off; a child-care subsidy from the state's Working Connections plan, which may decrease as her income rises; $300 a month in child support from her ex-husband, which she only just began receiving.

Goal

Get beyond living paycheck-to-paycheck so she can save for a house, her retirement and her boys' college.

Advice

Certified financial planners Katie Milojevich and Thom Allison of Allison Spielman Advisors in Bellevue applaud Kelly's creative thinking in keeping her expenses down.

For instance, she has no car payment, and she shares her rented condo with her sister, making her rent share just $545 a month.

They suggest she should also:

Trim and stash: Cut back a bit on discretionary spending and stash away the child-support checks which she's learned to live without in the three years since her divorce.

Multiply by 12: Kelly's favorite tip from her planners: When she's tempted to splurge on fast food or entertainment purchases, do a little quick math and project that monthly cost over a whole year. So a seemingly modest $25-a-month meal out for her family of three translates into $300 a year Kelly could be socking away.

"I tend to buy DVDs that I watch one time," she says. Now, she plans to rent or catch movies on TV and seek out low-cost or free entertainment options for the kids.

Plan for emergencies: She should continue to participate in her company 401(k), which she started this year when she qualified for it, but before she tries to save for college or a home down payment she should put aside several months' expenses in an emergency-fund savings account.

Kelly aims to put aside $5,000 in the next year, which will likely need to be tapped in the near future to help replace her car. The reserve may also cover any rises in child-care costs.

"We tell people they should be SLY with their emergency-fund savings," says Allison. "That is Safety first, Liquidity second, and Yield last."

Think Roth IRA: After funding her 401(k) and emergency fund, her next savings step should be to start a Roth IRA to save for college and a house.

Though deposits to the Roth IRA aren't tax-free, five years after setting up the Roth, Kelly could withdraw funds — tax-free and without penalty — for use as college tuition. Another advantage of the Roth — as a first-time home buyer, Kelly could also use funds stashed here for a house down payment, without tax penalty.

Raise withholding: Kelly's planners suspect she is having too much taken out of her paycheck in taxes and plan to raise her withholdings. Keeping more money in her check — rather than waiting for a year-end tax refund — will allow her to earn interest on the money sooner, rather than giving away some of those investment earnings to Uncle Sam.