An IRA is an individual retirement account. There are 2 types, Roth and traditional. For a Roth IRA, you put money in after you've already paid taxes on everything, and for a traditional account, you can put money in and deduct that amount from your total income tax--but you have to pay income tax when you withdraw the money after retiring. You can contribute up to a maximum of $5,000 per year (or if you're older than 60, $6,000 per year)--if you earn less than $5,000 per year, then the maximum you contribute is equal to your total income.
Ideally, you should invest your money with an IRA--it's for retirement, so you'll need to keep saving for decades. Best bets are invest in a stock index fund or a value fund (a mutual fund designed for long term). This will guard against inflation and help you earn extra interest for retirement.