At this point in the year, thousands of students are graduating from high school. Many of these students will receive a decent amount of money as gifts at their graduation party. But once the party’s over and done with, what should be done with the money?
1 – Save It
Start an emergency fund with your gift money. No, this isn’t exciting, but it helps form the foundation of good personal finance. If the thought of simply keeping all that money in savings account hurts too much, consider splitting it 50/50 so you save some and spend some.
2 – College Books
Text books are a huge expense for most students. Using your money on these can help take out the sting of education costs.
3 – Laptop
Most, if not all, college students would be well served to have their own laptop. Note taking, communicating, and entertainment will all be extremely easy with a notebook computer. By using your cash on this, you can avoid the temptation to start accruing credit card debt.
4 – Roth IRA
The best time to start a Roth IRA is now, when you’re as young as possible. For this to work however, you must make sure you earn income in 2010 and prove it by filing a tax return. You can’t contribute more than what you made in earned income.
5 – Go on a Trip
Maybe after you receive your gifts, you feel it’s feasible to go on a road trip with a group of friends. You’ll make great memories while also having the spending cash necessary to make it feel like a true vacation.
