5 Ways to Spend Your Graduation Money
With many graduates leaving their respected schools this spring, there are many reasons for them to be excited. One main reason? The graduation money they may receive from family and friends! For new grads, it can be tempting to go out and make an impulse purchase or even travel with their newfound cash. But before splurging, consider these other ways to spend your money!
1. Sit with a Financial Planner
If you are a recent graduate, consider using some of your graduation money to sit down with a financial planner. This can be a great start for your future, as financial planners can help graduates figure out both short-term and long-term goals. For graduates with student loans, a financial planner can help sort out your student loan payments and other monthly expenses such as rent and car payments. Many financial planners charge by the hour, but this expense could be well worth it if it helps you put a solid plan in gear and increases your financial literacy.
2. Pay Off Your College Loans
Many college students leave school with some type of student debt. With the average student loan nearing $37,000, recent graduates may want to consider using a percentage of their graduation money to help pay off debt. While this may only make a small dent in the amount you owe, it’s a good start, especially if it’s within the grace period you may be given. In the case that you are unemployed when your grace period ends, your graduation money can help cover your loan payments until you have a steady income.
Consider using your graduation money on an investment. Whether this means investing in a mutual fund, stocks, or a Roth IRA, you could end up building a pretty solid financial portfolio. These funds could later be used to cover big costs such as purchasing a home, paying for a wedding, or be put towards retirement savings. (I know you just graduated, but it’s never too early to start thinking about retirement!) Consider talking to a financial planner or advisor before investing your money so you can determine what type of investments are best suited to your goals.
4. Invest in Yourself
Following graduation, you may soon be entering into the workforce or possibly going back to school to further your education. For those entering the workforce you may want to think of using your graduation money for work attire or even a bag/briefcase to carry your documents. If you’re going back to school your graduation money may help you purchase books and supplies or help pay for tuition. Chances are you will need to make these purchases anyway, so consider using this money to invest in yourself.
5. Treat Yourself
You worked hard during your college years, so there’s no reason why some of your graduation money shouldn’t go towards treating yourself. If there’s something you’ve been wanting or saving up for a long time, consider putting some of your money towards this. But avoid making an impulse buy just for the sake of being able to purchase it. Consider using your graduation money on something that will remind you of the hard work you put into your education.
It’s understandable that these may not be the most fun ways to spend your graduation money, but they all will stand to benefit you in the long run. Whether it’s paying off your student loans a few months early or retiring with a little more cash at hand, it will be worth it. Are you a recent grad? How do you plan to spend your graduation money? Feel free to share your comments below.