We know it’s tempting to want to splurge at the mall, but graduates should put their newly earned diplomas to good use by following the lessons of financial education.
Graduating from high school is a major milestone, and also provides an opportunity for investing. After all, many graduates may find themselves receiving money from family and friends as graduation gifts. We know it’s tempting to want to splurge at the mall, but graduates should put their newly earned diplomas to good use by following the lessons of financial education.
Open a savings account

As MainStreet.com points out, graduation money may be the perfect opportunity for teens to work on their financial independence.
“For high school students without a savings account, graduation money provides the perfect opportunity to open one to start accumulating wealth independently of their parents,” the article states. “For college students, experts agree that this is the time to establish an emergency fund, something that most Americans unfortunately don’t have.”
Opening a savings account and starting an emergency fund is not only a smart financial decision, but can also help young people improve their fledgling credit scores as well.
Think about the future
High school graduates going to college can use graduation money to help with expenses like tuition, books, room and board and more. Any money that can be paid up front means less money will need to be borrowed (loans accrue interest).
Also, it’s not too early to think about retirement. In order to open an IRA, individuals are only required to have earned income that is taxed by the government. This means young people with jobs can start an IRA and put some of their graduation money away. For example, Roth IRAs allow account holders to have their money appreciate tax-free. Then, when the account holder reaches a certain age, he or she can access these funds without paying taxes on them.
Make practical purchases
If a young person does decide to spend their graduation money on possessions, it’s a good idea to consider items that will come in handy down the line. For instance, investing in a laptop will help high school grads heading off to college. And if a grad wants to buy new clothes, making sure some funds are set aside for a good outfit for job interviews is another smart decision.