<prompt> Human: For the first time in my life I have excess money, and I dont know what to do with it. I dont have debt anymore. After living expenses I usually have a couple grand leftover. Any time my checking account exceeds 5K, I want to put it somewhere... but where?Heres my situation: Age 26, single, no kids Employed with dreams of starting my own business Short term goal is to relocate out of state by spring Savings: 5000 Checking: 5000 Vanguard mutual fund: 1700 I put 1000 into it 5 years ago and havent touched it since... My company has offers 401K but does NOT offer matching. I do not have a 401K or even know what that is, TBH. I also dont know what an IRA or Roth IRA are.I was thinking just putting 50 of my excess money into my savings account, and another 50 into my Vanguard.Thoughts...?  <response>: An IRA Individual Retirement Account is a tax advantaged retirement account that you can contribute 5,500 to each year. With a traditional IRA, money contributed is not counted as taxable income but money withdrawn from the account upon retiring is subject to income tax at that point. With a Roth IRA, you pay income tax on the money you contribute but it can grow tax free and isnt taxed upon withdrawing. You can also withdraw the contributions but not the growth penalty free from a Roth IRA, while traditional IRAs are subject to early withdrawal penalties for any withdrawal before retirement. 