Put that wedding gift to good use; save it

Q:My fiancé and I are going to receive $10,000 cash as a wedding gift. We currently live paycheck to paycheck and have a little debt. We really want to use this money for our future home in the next two years, as we have never been able to save up any money to date. What is the best thing to do with such a large cash gift? Should we invest some or all of it? We have never invested before except for 401(k)s at work, and I don’t know where to start.

A:The best thing to do is to put it AWAY -- our of your immediate reach. If you're saving for a down payment, you DO NOT want to put it at risk in the stock market, which is a long-term proposition and a good place for your 40l(k) investments.

My suggestion is a money market fund that only invests in government securities.

Go to www.USFUNDS.com or call them at 800-US-FUNDS. Ask about their "Government Securities Savings Fund." You won't earn a huge amount of interest, but the money will be safe and it will keep up with inflation. You can add more to the account at any time (you can even set up an automatic monthly deduction from your checking account to add to this MM fund). And you can withdraw from the account by writing a check -- minimum $500. That will keep it away from temptation -- and believe me, you will be tempted to dip into it for something "important." So put the money away, forget about it, add to it, and in a few years you'll be ready to buy your dream house.

Terry Savage is a registered investment advisor and the author of the newly published The Savage Number: How Much Money Do You Need To Retire? (256 pages, Wiley, $24.95).