12 Smart Ways to Make Your Graduation Money Work for Your Future

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The average college graduate receives $1,847 worth of cash and gifts from family and friends. While it’s tempting to splurge all of it, your future self will thank you for spending it wisely. Don’t worry. With these 12 smart spending strategies, you’ll still be able to treat yourself while learning to be financially responsible.

1. Buy Discounted Gift Cards for Big Purchases

If you’re going to make a big purchase like a new TV or laptop, consider buying a discount gift card to save money! Raise is one of many online marketplaces connecting people looking to sell their unwanted gift cards. You can score gift cards at stores you regularly shop in for up to 30% off.

2. Shop Through Cash-back Apps

Back in your parent’s day, there were coupons. Today there are cash-back apps. So whether you’re buying work clothes, new electronics, or stuff for your apartment, these apps help your graduation money go further by giving you a portion of your total sale back. Check out Rakuten, Ibotta, Fetch Rewards, and MyPoints, to name a few. Although some are a complete waste of time, there are other cash-back apps that are definitely worthwhile. 

3. Keep Control Over Your Spending

While $1,847 is a lot of money, it can be gone before you know it if you’re not careful. Research has found that people tend to overspend when using debit or credit cards. If you’re starting to feel like your spending is out of control, try shopping with cash. You’re more likely to think twice about what you’re buying when you have to count out the amount due, which leads to less spending.

4. Set Yourself Up to Cook at Home

Now that your college meal plan is gone, you’re going to find that food will be one of your three biggest expenses. The average American spends over $200 a month eating out! There’s nothing wrong with eating out here or there, but eating out every day and grabbing expensive coffee every morning is sure to bust your budget.

By taking $200 of your graduation money to buy an inexpensive coffee maker, pot & pan set, and other small kitchen items, you’ll be setting yourself up for not just healthy eating but responsible spending year-round.

5. Consider a Season or Annual Pass

Are you a frequent visitor to an amusement park, museum, ski resort, or board game cafe? Consider buying an annual pass instead of sporadic day tickets to save money over the course of a year. Ask yourself these 2 questions to determine if you could save money with a season/annual pass to your favorite spots: How many visits do you need to go to break even on the pass cost? Will you actually go that many times? After doing the math, you might find it’s actually more economical to buy a season pass.

6. Set-up An Ergonomically Correct Home Office

With work from home here to stay in some form, setting up a proper workspace must prevent painful and costly neck and back injuries. A survey from the American Chiropractic Association reported a surge in neck and back pain since people moved en masse from a home office to working from home.

Consider purchasing an ergonomic keyboard and proper desk chair. To keep more of your graduation money in your pocket, “raise your computer monitor to eye-level with boxes or books if you can’t buy a new desk,” said says Dr. Peter J. Scordilis, a Certified Chiropractic Sports Physician at Scordilis Family Chiropractic. “Whatever desk chair you use, make sure your feet can touch the floor and that you’re reducing stress on your back by keeping your knees at 90 degrees.”

7. Start an Emergency Fund

Things are going to happen. Your car will get a flat tire, your phone might break, or your laptop stops working. Adulthood is full of unexpected expenses. Your future self will thank you for saving for a rainy day. Putting some of your graduation money into an emergency fund starts your financial future on the right track. It decreases the need to ask your parents for money or use high-interest credit cards to cover unexpected expenses.

8. Tackle Your Debt

I know. Who wants to pay bills? But it’s the reality of becoming an adult. The cycle of debt can cost you thousands of dollars or more over time. It’s time to start paying down any credit card debt you may have incurred in college. Check out the back of your credit card statements to see exactly how much your purchases will end up costing you when you only make the minimum monthly payment.

9. Pay Down Your Student Loan

According to the Federal Reserve Bank of New York, the average student loan monthly payment is $393. Before you know it, you’ll be required to start making those payments. Set aside some of your graduation gift money for the first couple of payments to ease into this reoccurring expense. The sooner you pay off your student loan, the sooner you’ll free up that money for other things in your life.

10. Start a Savings Account for Big Purchases

Now that you’ve graduated, you’re probably going to want to buy some of those things you couldn’t afford while in school. It might be a dream vacation or a brand new car.

But it would be best if you had a plan. Start a sinking fund in high yield savings account with a portion of your graduation money. Determine how much you need for these things, and then you add a little more to the pot specifically for that expense every month. If your sinking fund meets the minimum requirements for a high yield savings account, be sure to put it there so your savings make a little money for you.

11. Invest in Yourself

Now is the time to invest in yourself. The ROI will pay dividends for decades to come. Whether it’s a class to learn a practical skill like cooking or car repairs or a certification related to your career, now’s the perfect time to invest in new skills.

12. Put Your Money to Work

After moving into your first apartment, funding your emergency fund, and paying off credit card debt, consider investing any remaining graduation money in the stock market.

Investing is one of the best ways to put your money to work for you, as the number of years you’re investing in the stock market matters. If you start investing $250 a month at the age of 22 and keep investing $250 a month until the age of $65, assuming an annual investment return of 8%, you will have more than $1 million in investments when you retire. Now, if you decide to wait to start investing until you’re 30 years old, well, that final number at age 65 goes down to just $539,088.23. It’s almost cut in half.

Go ahead and open your 401K through your employer or a Roth IRA through a brokerage account. The sooner you get started, the sooner you start making money from your money.

It’s time to take ownership of your finances and put your graduation money to work. You can do it—best of luck, Graduate!

This post originally appeared on Wealth of Geeks and was republished with permission.