Got graduation day dough? Here’s what you can do:
Money is the #1 gift for new graduates. According to a study done by Hallmark, 95% of the people surveyed saw money as an appropriate gift for High School and College graduates; amounts ranging from $20-$50(+). In the US, about $5 billion goes to new graduates and 58% of that is in cash. Unless you studied accounting or finance before graduation, you may not know all the great ways you can put your money to good use for later.
Consider this as a crash course in money management – Savings 101: For New Graduates! Regardless of how much money you’ve received, here are some ways to consider delegating portions of those grad dollars:
- Checking, Savings and CDs: This is the first option you’ll want to consider utilizing. A good way to take advantage of Grad Day dollars is to place at least 60% of the total into either a checking/savings account or into a Certificate of Deposit.
Why? And what’s the difference? – Placing money into a Checking or Savings account allows you to gain interest on the amount deposited. You may withdraw any amount at any time; often with the added convenience of an ATM/Debit card on a Checking account. However, because Savings accounts aren’t meant to be frequent-transaction accounts as Checking accounts are, there’s a limit to the number of withdrawal or transfers you can make.
On the other hand, CDs allow you to put a certain amount of money into an account for a fixed period of time, but there is usually a penalty if you make withdrawals before the term ends. When the term does end and CD reaches Maturity, you’ll receive your initial deposit plus newly earned interest.
- Debt – For College Grads: There is a 6-Month grace period after you graduate before student loan bills begin to arrive. Consider setting aside a portion of your Grad dollars to take care of the first payment. This amount can also be added to your overall checking/savings plan so that you may earn interest on it in the meantime. This way, your first bill is ready to be paid, 6-Months ahead of schedule!
- Apartments, Dorms and Gas: For graduates continuing their education – Be sure to set aside a portion of your money for your dorm. The late night pizza and early morning coffee can add up quickly! For commuters, gas money is an essential expense to consider planning ahead for, and using some grad dollars is a good start.For those entering the workforce – Now would be a good opportunity to set aside some money for housing. If you are living at home, you can begin saving up for that first apartment or a home of your own.
For those already in their own living space, consider using this portion to accommodate for loan payments and other expenses that are sure to arise will be helpful – Prepare for a rainy day!
- Books, Supplies and Professional Attire: Grads continuing their education – consider setting aside a portion for upcoming school supplies: Books, laptops, etc. They can get very expensive, very quickly.For those entering the workforce– Using a portion of your Grad dollars for a new or updated professional wardrobe may be beneficial and can aid you during those key interviews and networking events.
- Celebrate! Last, but certainly not least, congratulations on your diploma! Take a portion of your well earned money as a reward for all your hard work – Enjoy it!
Congratulations to all the Graduates of 2015!!
We wish you all the best.
– Bank5 Connect