Managing Graduation Gift Money

No graduation traditions are more welcome by teenagers than the receiving of graduation gift money. As a parent of a petulant teen, (sorry, son) I know how tough getting him from point A to point B can be during this busy season. Even though he was valedictorian and leader in his class, he didn't seem to excited about the social events his graduation generated. This was until he received the first gift card! Then we took a crash course in managing graduation gift money.

A graduation windfall may cause the unprepared teen to spend his money foolishly, squandering the well-wishers' gifts on poor purchases. Even a kid with a good head on his shoulder may make poor spending decisions. Graduation money is likely the most cash the young adult has ever managed at one time. She won't need Mom and Dad to swoop in and "hold her cash" for her, she'll need a quick course on what to do and how to do it.

We counseled our son using some insights we have learned along life's way. Perhaps these tidbits will help your teen.

• Don't spend anything the day of graduation or the day after. A self-imposed 24-hour waiting period will help the teen sift out impulse spending.

• Don't loan your graduation money to your friends or anyone else.

• Do stash back enough money to cover 3 months of expenses. This will make the transition period between high school and college or high school and be a little easier.

• Do spend money on textbooks. Many grants and scholarships do not cover the cost of books, special calculators or lab fees.

• Do open a savings account. Deposit ½ or even 2/3 of your graduation gift money in the safest place, the bank.

• Don't take your graduation money on spring break! You'll come home with empty pockets.

• Buy supplies for your dorm room. If the teen plans to stay home, then encourage her to buy personal supplies to make their digs more comfortable.

Parents, do explain to your teens that these "raining money" occasions are rare. Encourage them to think of gifts like these as blessings not a source for living. Graduation cash and gifts can help a graduate get a good start in life, if they use some wisdom!

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