It's never too early to start saving for retirement. Get investing tips for beginners and learn to decode all those tricky financial terms. Even if you can only invest $100 a month, we'll help you build up your savings.

We've got about $5,000 in savings. What's the best way to invest our money?

Assuming you have no significant credit card debt, have a low interest rate on your student loans, and have enough income to cover your mortgage and/or car payments, contribute the maximum to your 401(k), and make a yearly contribution to an IRA or Roth IRA, you're in a position to invest.

You have three basic options: stocks, bonds, and cash. Most financial advisers argue for diversity in your portfolio, which means choosing all three options at once.

A rule of thumb that some experts use is a ratio of 80:20 ratio of stocks to other conservative investments like bonds if you're 20+ years away from retirement. If you're looking for a less aggressive option than stocks right now, go with mutual funds, which you purchase from an institution and require less research and daily upkeep because they give you automatic diversification. As for cash, consider an online savings account, a money market account, or high-yield CDs.

Nestpert Brett Graff, The Home Economist and former government economist

Think the stock market is just for bigwigs? Guess again. Truth is, with stock prices at a major low, this is a great time for market newbies to get in on the action.

Step 1: Analyze Your Accounts

Do you have money to invest? The cash you put into the stock market should be money you can afford to lose. Look at your budget and see how much is left over after housing, transportation, emergency fund padding, and your retirement savings -- stocks shouldn’t replace your 401(k) or IRA. Decide what chunk of that balance you can afford to put into the market, whether it’s $100 or $2,000.

Step 2: Buy What You Know

One of the first questions new investors often ask is: “How do I know what to buy?â€� Well, you can make money buying the brands you know best. Think of it this way: If you’re really into cycling, you know way more than the average person about which bikes are hot right now or the new products that are coming out. Use the knowledge you already have to make smart investments.

Step 3: Check out Big Brands

If you want to start with a safe, steady stock, major brands like Walmart, McDonald’s, and Disney (just to name a few) are solid options. With the economy in the tank, you can now buy shares for as much as 40 percent lower than they’ve gone for in the past, making it easier than ever to invest without breaking the bank. The trick is to buy low now and sell high later. Also check out Morningstar.com to see the top-rated funds.

Step 4: Test Your Skills

Before dishing dollars into the market, go to Investopedia.com and Marketocracy.com for tips and advice in a language that’s easy to understand. Another great resource is WeSeed.com, which allows you to create a portfolio using fake money. You can “buy� stocks in your area of expertise, see how your investments would do in the real market, and get comfortable with how stocks work before investing with real dough.

Step 5: Talk to People

Ask friends, family, and coworkers to weigh in on companies and products you’re thinking of investing in, and feel free to dish on the brands you know best. You can also check out Facebook, investment clubs, and our Money Matters message board.

Nestperts Jennifer Openshaw, author of The Millionaire Zone: Seven Winning Steps to a Seven-Figure Fortune and cofounder of WeSeed.com; Katie Dunsworth, coauthor of The Smart Cookies’ Guide to Making More Dough

What's the difference between a 401(k) and an IRA?

A 401(k) is a pension plan set up by your employer to which you contribute from your earnings (you'll pay taxes when you withdraw from the account but get the immediate benefit of investing with pre-tax dollars). Many companies offer matching contributions up to a certain amount -- yes, free money! In 2009, you can contribute up to $16,500, and there are penalties if you withdraw cash early.

Individual Retirement Accounts (IRAs) are private retirement funds set up at a bank or other investment brokerage. If you don’t have a 401(k), you can contribute up to $4,000 yearly and claim a tax deduction on your annual return. You're allowed to contribute more, but the law requires you to pay taxes on the amount first. The money grows in the investments you choose, and when you reach age 59 1/2, you can start taking out the money without penalty, paying taxes on any gains.

A Roth IRA is related, but different. You're allowed to contribute up to $4,000 per year as long as you pay income tax on the money, but when you start withdrawing after age 59 1/2, you don’t pay taxes on the gain. But if you and your spouse's annual gross salary is above $160,000, you're no longer eligible and should opt for a traditional IRA.

Should I participate in my company's stock purchase plan?

Don’t let the current state of the economy scare you away from a potentially good investment in the company where you work. An employee stock purchase plan (ESPP) allows you to invest your earned income in company stock at a discount. This is totally different from whatever options you may have with your 401(k) to invest in company stock, the matching contributions your company might hand out in stock, or even the similarly named employee stock ownership plan (ESOP), which allows you to invest your pre-tax retirement savings in company stock.

The ESPP is more like a stock option, where you'll have a window of opportunity to buy stock at a particular price. The whole transaction may take place through payroll, so there could be little paperwork. Depending on how well your company performs, your financial rewards may vary, so you could profit a little or a lot.

Should I switch banks? What should they be offering?

There's no reason why you shouldn’t shop around and get the best deal possible. There’s no penalty for moving your money from place to place, so the only consideration is time and convenience. When you’re thinking about what branches are closest to you, don’t forget that there are web-based banks that often offer the big discounts as a way of getting new customers.

Compare offers at websites like Bankrate.com and go through the various features. The most common offer is free checking, but legally, that only means you won't have a minimum balance or activity requirement. You may be charged for bounced checks and other infractions, so read the fine print and see how free it really is.

You might want to consider a bank that offers an ATM card with airline mile rewards (Fiji, anyone?), a cash back bonus, or a bank that offers a refund for ATM fees you incur when you don’t use the bank’s own machine. Also note their rates on savings accounts and options for CDs and other investments.