Five smart things to do with your graduation money

BIRMINGHAM, Mich. - Aug. 21, 2015 - PRLog -- It’s graduation party time and lucky youth are likely to experience an influx of cash from family members and loved ones offering their congratulations.

That money might be thrown to the wind with temporary summer fun or it could help a grad propel to a brighter future. While it might be tempting to spend all of the monetary gifts on vacations or other splurges there are some things to consider first.

Bank of Birmingham (https://www.bankofbirmingham.com/), in Birmingham, has provided a simple list of things to consider before blowing all of the graduation cash.

“While it might be tempting to spend all your money on clothing, electronics and other discretionary items, showing self restraint and managing your money wisely will ultimately lead to sound financial habits as you get older,” said Pamela Audette, senior vice president and relationship manager for Bank of Birmingham.

Put Some into Savings

This is a perfect opportunity to set up a separate savings account – to use to save money for the future. For high schoolers, it’s important to remember that throughout college and all of life there will be plenty of expenses that might tempt one to drain the main savings account. Use a separate savings account for non-necessities.

Prepare for the Next Step

If a grad is moving onto college, there will be plenty of costs associated with that move. There are books, dorm expenses, and of course tuition. Use some graduation money to offset those expenses to set up for a more manageable financial future.

Pay Off Any Debts

If graduating from college, there has most likely been debit that’s incurred. Whether it’s student loans or credit cards, the influx of cash from graduation can likely make a dent. Using money to reduce student debt can really help down the road.

Consider Investing

Investing might sound intimidating at this time, but consulting with a financial professional can really help through the process. So if there’s enough left over after paying off debts and setting up for the future, making some investments can be a smart move.

Have Some Fun

Once good financial decisions have been made for the future, it’s time to splurge. Celebrate graduation! Buy that one great item, take a vacation. Now it’s possible to spend the money guilt-free because the work has been done to at least start the path to a solid financial future.

         ###

Bank of Birmingham is a full-service community bank founded in 2006, to provide competitively priced banking services and products that meet the needs of individuals and businesses by listening, advocating and delivering banking solutions. It is publicly owned with more than 800 individual investors. Bank of Birmingham continues to be recognized as one of the safest banks in the country. More information can be found at www.bankofbirmingham.com