High School Grads: Show Me the Money

Tips for Putting that Graduation Money to Good Use

Date: June 1, 2010

Contact: Paul Golden 303-224-3514, [email protected]

DENVER—For most teens, the surge of cash they receive to commemorate their graduation achievement will be the largest amount of money they’ve ever had to manage. But that diploma doesn’t necessarily mean they have the answers to pass this financial test.

“Parents soon will watch their children move out and begin an independent life full of new financial responsibilities and challenges,” says Paul Golden, spokesperson for the National Endowment for Financial Education. "It’s a good idea to exercise your influence now and make sure your child knows the importance of managing money for the long run.”

According to a recent online poll commissioned by NEFE and conducted by Harris Interactive in May 2010, 62 percent of those who graduated high school in the past five years and received money for graduation received up to $500 as part of their gifts. Thirty-eight percent received more than $500. That’s a significant amount of money.

Help your teen start his or her future off right by using that money wisely. NEFE offers these five smart moves for managing that high-school-graduation windfall.

1) Stash some into savings

Set aside a portion of your graduation money into a savings account. According to the NEFE/Harris Interactive poll, 19 percent of those who graduated high school in the past five years and received money for graduation have, or planned, to put the majority of their graduation money into savings. Whether you’re heading off to college or going into the work force, your life is about to change in a big way. Unexpected financial bumps happen to everyone—so be prepared. Setting yourself up with a savings cushion not only is a smart strategy, but also should be your top priority.

2) Buy books and supplies

Heading off to college in the fall? You’ll want to set aside a big chunk of graduation money for books and supplies for your college classes. Twenty-seven percent of those who graduated high school in the past five years and received money for graduation in the NEFE/Harris Interactive poll have, or will, spend the majority of their graduation money on college. Save money on textbooks by getting an early start and finding the books you need online. And always buy used.

You also may consider buying a new laptop computer. This will be a solid investment over the next few years, but remember, you should focus on efficiency and portability over all of the latest bells and whistles.

3) Put on your blinders

Chances are you will earmark a portion of your gift money for buying technology. For Generation Y, there’s a dizzying array of electronics available, and it seems every few weeks the “next best thing” graces the store shelves. You constantly will be tempted by new toys at the campus bookstore, so it’s important to develop self-control now.

4) Prep your dorm room

Moving into a dorm this fall? You likely will need cash to transform a barren dorm room into a comfortable, yet efficient, living space. You’ll need accessories like towels, linens and blankets, bathroom and kitchen supplies, and a work space. A mini-refrigerator may come in handy too. But exercise caution. Although that color-coordinated bedroom set at the local department store is vibrant and fun, you can run up a lot of expense on what will soon become throw-away or leave-behind items.

5) Celebrate!

Graduating from high school is a big accomplishment, so feel free to mark the occasion. Whether it’s new clothes or perhaps a vacation with friends, you’ve reached a goal and that deserves a reward.

Graduation 2010: Cover the Basics Before Your Child Leaves the Nest
Parents provide the most influence on their children’s financial knowledge, attitudes and behaviors. Our graduation series provides information and topics to help you start a conversation with your kids. For more information and to download NEFE’s 40 Money Management Tips Every College Student Should Know, visit: here.

Harris Interactive Survey Methodology 
This survey was conducted online within the United States by Harris Interactive on behalf of NEFE from May 10-12, 2010, among 2,596 adults ages 18 and older. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables, click here.

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Contacts

  • Paul Golden

    Media Relations Director

    Direct: 303-224-3514
    Cell: 303-918-3620
    [email protected]

  • Patricia (Pat) Seaman

    Senior Director of Marketing and Communications

    Direct: 303-224-3538
    [email protected]