5 smart ways to use high school or college graduation cash gifts.

Many graduates receive gifts of cash from family and friends to celebrate their incredible academic achievements. Of course, what you do with the money is up to you. However, before you spend it, consider making one of the moves below to boost your financial fitness.

Put it toward your education

If you’re continuing your education, the surest way to keep student loan balances low is by borrowing as little as possible. Using your graduation money for books, tuition and travel expenses to and from school can help limit how much you need to take out in loans.

Save it in an emergency fund

At some point, everyone faces unexpected expenses. A car breaks down, a job is lost or hours get cut, an insurance deductible must be paid. If you have an emergency savings account in place, incidents like these will have less impact on your monthly budget.

Pay down debt

One of the smartest moves you can make for improved financial wellness is paying off high-interest credit cards or loans. In addition to saving money on interest, paying off credit balances will help improve your credit score.

Invest the money

Have you heard the adage “The best time to plant a tree was twenty years ago; the second best time is today?” The same principle applies to investing. Spend a few minutes with a compound interest calculator to see how much your money could grow if invested long term.

Consider an Individual Retirement Account, a Certificate of Deposit, or investing in mutual fund. As always, we encourage you to consult with a knowledgeable tax or financial advisor about your individual situation. 

Treat yourself

You can certainly splurge and spend the money any way you want. If this is your preference, consider splurging just a portion of your gift money. For example, set aside 10% or 25% of your total gifts for a splurge. Then save or invest the rest.

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