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Friday, June 9, 2017

9 Things To Do With Your High School Graduation Money

I've worked at several high schools and have seen my share of graduations.  High school graduations are a rite of passage into adulthood for teenagers here in America.  Graduating teens get to be the center of attention, and even though they often downplay the importance, graduation is a BIG deal, especially for parents and extended family.  Families showering their teen graduate with gifts, including flowers, traditional, candy or money leis, and balloons, at the graduation ceremony is just the beginning.  Many families take their graduate out for dinner after the ceremony, and then even hold a graduation party for friends and out of town guests sometime within the next few days.

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For parents, their teen's high school graduation can be an expensive event.  Note: Your teen doesn't care.  They love the attention, but most importantly, they love all that money coming their way.  Depending on the size of the family and number of invited guests, the average (as in not from a wealthy family) teen can get anywhere from a few hundred to over a thousand dollars.  What (smart) things teens can do with their money will depend on their plans for their future beyond high school.  Teens without plans will do what they've done all of their lives, just wing it.  They'll spend their graduation money on stuff like shoes, clothes, and things of no self-improvement value.  Plain dumb in this era.  The smart teen with plans and goals should consider using their money in the following ways:

1.  Take a general ed class at the local junior college and get ahead of your prerequisites for college.  Just make sure it's transferable to the university you're attending.  If you're not headed to a four-year university, great, you have early credits to finish your two-year JC program on time.

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2.  Get your driver's license.  If you haven't yet gotten your license, then use your graduation money to purchase a driver's training course, and get your license before you leave for college.  Even if you won't have a car to drive as a freshman, it's vitally important you take care of this as soon as possible.

3.  Buy a bicycle and helmet.  Many college campuses and towns are bike friendly.  You won't have to drive everywhere and can save on gas if you're willing to pedal to local destinations.

4.  Pass down your high school computer or laptop to your younger siblings and buy yourself a reliable and efficient laptop.  You'll need it!

5.  Pay for part of your career or technical education tuition if you're not attending college.  If you're going to a two or four-year college, use your graduation money to pay for semester 1 textbooks.

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6.  Save for a used car.  If you intend on working after high school, (while attending some type of school part-time hopefully) you're going to need wheels to get around.

7.  Buy yourself interview attire.  For men, this means getting a power suit, slacks, shirt and tie, and black dress shoes.  For women, you may want to buy black dress pants, a navy blue blazer, a nice blouse or button down shirt, a black dress and tights, etc.  You have to have this type of attire in your wardrobe no matter what you decide to do after high school.

8.  Travel.  Just get it out of your system.  I realize Millennials and the younger generations are all about having great experiences.  Well, if you can travel somewhere with your graduation money and have some fun prior to getting really serious, then go for it!

9.  Open up a Roth IRA and fund it with 80% of your graduation money.  Use the other 20% to splurge on whatever.  The benefits of Roth IRAs include being able to use the money you've saved for educational expenses without incurring withdrawal penalties.  Or you can leave the money in the account and contribute more over time to save for retirement.

There are many other ways teens can use their graduation money.  And there's really no way of stopping them if they want to do something stupid with their money.  Giving them sound ideas like the ones above may sway their mindset and get them to do something positive for their personal development.

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