Protection: As you list your essential living expenses, I hope you will pay special attention to the insurance category. Bad things do happen to good people, and we never know when the ax is going to fall. For serious risks, like the possibility that your house could burn down or a child could need expensive surgery or that the main breadwinner could die prematurely, your savings are not going to be adequate ... you'll need higher-powered protection. Protecting your family against these sorts of possible financial disasters is the legitimate province of the insurance industry.
Some young families are tempted to cut expenses by skimping on life, health, disability, auto and homeowners or renters insurance. Professional financial advisors, even ones who don't sell insurance, unanimously recommend that you budget for disaster protection. A good insurance professional is invaluable; ask relatives and friends to help you find one who will sell you only the protection you need you need.
To get a good idea of the cost of different kinds of term life insurance, try www.SelectQuote.com.
Emergency Money: Because you work in the construction industry, you are already aware that even a very good job can be suddenly disrupted. A good first financial goal for young families dependent on a paycheck to cover their living expenses is to accumulate three to six months of "emergency savings" to help them through a period of unemployment. In your case, three months of expenses is going to be about $15,000. So, of the $25,000 that you have accumulated, it would be a good idea to earmark $15,000 as emergency savings.
Emergency money needs to be easily accessible, and shouldn't be invested in anything that can fluctuate much in value in case you need it suddenly. Today, money markets and bank savings accounts pay very little interest, but at least they keep your emergency money safe and accessible. To earn a little more income on your savings, you may want to put as much as half of it in a short-term bond fund that will earn perhaps 4% a year. But keep in mind that even this pretty safe investment will fluctuate in value. One fund we like to use for this purpose is Vanguard Short-Term Corporate Bond Fund. You can obtain account applications at www.vanguard.com.
Other short-term goals may include paying off credit cards, accumulating a down payment on your first home, or completing your professional education. These savings goals will usually take precedence over investing for longer-term goals like children's college expenses, starting a business, buying a vacation home and funding your retirement. For these goals that are further in the future and/or are more flexible as to when they need to be achieved, it is probably appropriate to invest your money in securities that are likely to be more volatile in value in the short term but that may experience higher returns over the years.
Investing: Finally we get to your original question. Investing is a vast and complex topic. Opportunities abound, but the risk of serious loss is ever-present. So, my sincere encouragement to you is to begin to increase your own investment IQ by doing some reading, and to ask people you trust to recommend investment professionals they have found to be knowledgeable, trustworthy and helpful. These steps will help insulate you against the self-serving advice of charlatans who have been around, as they say in law school, since the memory of man runneth not to the contrary.
As a starting point, I want to recommend to you a brand new book written by two savvy and experienced financial advisors. Resource Planning: The Internet, Money & You by Dee and Gene Balliett is very readable, covers a wide range of personal financial issues and is arranged in two-page snippets that make it really easy for a lay person to get the basic understanding you'll need to avoid big mistakes and to build your family's financial security over the years. The book is a treasure trove of Internet resources; it costs $29.95 at www.Amazon.com. By the way, the Ballietts also have an extraordinary Web site (www.balliettfs.com) with some great coaching advice; I highly recommend investing a half hour to soak up some of their wisdom.
Another book, actually a series of titles that is available in book and audiotape format, is Rich Dad, Poor Dad, by Robert T. Kiyosaki. You can find them on Amazon for under $12. Try Rich Dad, Poor Dad: What The Rich Teach Their Kids About Money-That The Poor and Middle Class Do Not! and Rich Dad's Guide to Investing. These read like novels but are packed with sound advice. One of my own sons, in his mid-thirties, found them really insightful and motivating.
Two no-load mutual fund companies that have extensive educational materials on their Web sites are Vanguard (www.vanguard.com) and T. Rowe Price (www.TrowePrice.com). You might also enjoy The Motley Fool (www.fool.com) for a no-nonsense look at mutual funds, insurance and a host of other personal financial issues. Another respected site for investor education is the American Association of Individual Investors (www.AAII.com); you might even want to take out an annual membership ($49) so you can receive their monthly magazine and have greater access to their on-line educational tools.