So, like most recent graduates, I’ve been lucky enough to get some gifts, mostly cash, from relatives.
But now I’m wondering…what do I spend it on? I’m not a huge spender, so it makes me uncomfortable to spend it on frivolous stuff like food or clothes or whatever. I got a full-ride scholarship from my college, so I don’t really need the money for that (I guess I could use it for textbooks or summer classes, but my parents would probably pay for that with my 529). Do I just put it in a savings account?? Use it for dorm room stuff?
So, parents: do you have any rules/suggestions for what your kids should do with graduation money? Graduates, what did you spend it on? Does the amount matter?
Thanks in advance (and congratulations to all the 2019 grads reading this!!).
I tell my kids… If you can’t think of something to buy, save it. There will be plenty of times (and probably sooner vs later) when you’ll want something and wish for the extra $$$. Don’t just spend money because it’s there and you feel obligated
I doubt it’s enough for an adventure (unless it’s a short one), but investing it is a good idea – maybe I’ll buy a CD or something that’s not too risky.
I guess it’s not that much money in the grand scheme of things (about what I made working last summer), but a few relatives gave me larger-than-expected gifts and I just feel like I should find something “special” to use it on…I don’t want to spend it now at Starbucks, but I don’t want to wait four years and end up spending it on grocceries, you know? You’re right – I’m sure I’ll eventually find a need, or rather the need will probably find me!
I appreciate the advice – honestly, I’m also just curious what other people bought (or didn’t!) and I thought asking my friends would be rude
My kids paid for their own textbooks and spending money in college. Your parents can use the 529 for tuition, room, and board. But any of the rest of the expenses will come out of their pockets. At a minimum, cover your own spending money and any fees for clubs, frats, etc. College students are old enough to not need an allowance from their parents any more.
Save what you don’t spend. You might want to take an unpaid internship and have some expenses with that. Or study abroad, and want to do some extra traveling. Or need money for an apartment deposit or moving expenses when you get out of college.
My daughter didn’t get a ton for graduation gifts, but what she did get she is using for the following: a round trip ticket to California for her best friend’s birthday, a mini fridge and under bed storage for her dorm room, savings for things like drug store needs and laundry for her first semester.
I’ll add that my youngest saved a lot of her grad money, summer earnings, and even some from her measley grad school stipend. She has a very solid savings balance. So… when there was a funding snafu in her grad school lab this summer, and she could only get a part time TA position for pay this summer so she could keep her research moving forward, she could absorb that pretty easily. She also had some unexpected car repairs last year that she could cover. There is a LOT to be said for having a good savings balance coming out of college.
My D saved all her graduation $ and used it through out her freshman year for small incidentals (concert and show tickets mostly) and then when she went abroad. She still has the majority of it though and it’s in an interest accruing account through her school’s credit union. She didn’t want to tie up the money incase she needed it.
I do think that most people who give cash as a graduation gift think that the student will like it for spending money at school, or maybe for something fun like a trip (after school starts, chances are you’ll make some great friends and take a weekend trip away or something), or maybe on some fun stuff for their dorm. Even the larger than expected gifts…I don’t think they are thinking that you would buy yourself something extravagant, especially if they know you are kind of a thrifty person. But yes, if you are talking like a thousand or more over what you think you might need for the above, sure, you could invest it in something and let it set there, or just sock it away in a savings account for when something special does come up. Congratulations!
If you cannot think of anything to spend the money on, then don’t spend it. Save the money and use it for when you really need it. It is not necessary to try and find something you can spend your money on when you do not really like it or need it.
