What to do with graduation money

RENO, Nev. (KOLO) - Graduation is a big day for many adults, as all the late hours, tests, and stress are rewarded with a diploma. For some grads, this is not the end of their journey.

“I want to join UNR and get my bachelors in neuroscience and continue with pre-med and see how far I can get,” says Mevini Aponsu, a TMCC graduate.

For now, though, it's time to bask in the accomplishment, and sometimes relatives, friends and loved ones recognize that accomplishment too and offer a gift of cash.

What to do with those greenbacks may be an even more crucial question than ever before.

“Congratulations for this accomplishment that is huge. It is going to be with you the rest of your life. Take a second. Figure out before, don't overreact, and don’t jump in before seeing how deep the water is,” says Richard Jay, a Wells Fargo Financial Planner.

Jay says some grads may take the money and go on a once-in-a-lifetime trip to Europe, for example. That may be fine, he says; who knows if you'll ever get the chance again? But ask yourself some questions.

“The big question is, do you have a job? Do you have a job to go to after graduation? If not, you might want to put some of that in a savings account,” says Jay.

But as Jay knows for many many graduates, there is the elephant in the room. Student debt.

“That is debt out there that is going to remain out there and it is going to remain with you the rest of your life until you do pay it off,” says Jay.

There are other options as well. Opening up a 401 or Roth Retirement account. Money can build up by the time you are 65. It also gets you in the habit of saving.

How about paying off other debt, like credit cards? Do you need a new cell phone? What about clothes for job interviews?

All options are on the table and some decisions are better than others.
Graduating students we talked to--all four of them--were ready with their answers.

“Right now I would pay off some of the debt I owe. And use the rest to go forward with books and classes,” says Amber Hallman.

“I would like to invest it in my education at UNR. So I would like to pay money,” says Eliana Llanos, a TMCC graduate.

“I don't think students want to be thousands of dollars in debt and stuff like that, so I definitely think that is what they want to spend their money on,” says Jason Pinto-Moldonado.

“If there is any time where I could use it outside, I would probably try to help other students if there is a possibility I could do that,” says Aponsu.

If an average gift for a graduate is $53, a student could receive more than $500 from family and friends after picking up that diploma.