This year, the month of May is filled with several graduations and graduation parties for my family. My son graduates from a 2-year college program as well as from high school. My nephew graduates from a 4-year college, and my niece graduates from high school. With all of these milestones and celebrations comes gifts for the graduates. The gift of choice for these young people is cash.
Since I will be giving cash, I can’t help but wonder what is the best way for the graduates to use their money? It will likely be different for my nephew who is graduating from college compared to my niece and my son who are graduating from high school and heading off to college this fall.
According to SmartAboutMoney.org, my nephew needs to be careful not to make some mistakes as he heads out in to the real world. The mistakes he should try to avoid include:
- Not taking time to learn how to manage money.
- Disregarding paying himself first.
- Overspending on credit cards.
- Accumulating too much debt via loans.
- Buying more house than he can afford.
- Not understanding his employee benefits.
- Passing on contributing to a 401(k) or 403(b) account.
- Skipping health insurance.
- Failing to purchase disability insurance.
- Not planning for possible future earning interruptions.
To help my nephew make good financial decisions, I plan to give him not only money, but also a book or two about financial planning, or something along those lines. I hope that he will take some time to read these books, which might help him develop the skills for achieving financial success today and in the future. I will also send him more articles like this one and others that I think will help him on his way to financial success.
For my son and my niece, who will be going off to college, this is an exciting time. I offer some different suggestions for them. The list of tips below is from ed.gov:
- Make sure your college has your financial aid ready for you.
- Apply for a part time job for the school year early (like now).
- Compose a good resume and start networking.
- Create a budget and learn to manage your money.
- Register for time management classes so you can brush up on your skills.
- Start using coupons (they’re not just for mom) and learn how to get a good deal (by negotiating).
- Understand how to keep you and your things safe and secure.
- Don’t forget to fill out the FAFSA again in the fall!
I hope this information will help the graduates to make sound financial decisions with their stash of graduation money as they head off to college or into the real world.