Daily Dupaco

Monday, May 09, 2011

How to handle that grad cash

By Emily Kittle

Perhaps the best gift parents can give their high school graduate is some timely financial advice.

Many in the class of 2011 are about to come into a bit of a windfall - thanks to friends and family who will be padding their graduation cards with all kinds of cash.

In the past five years, 62 percent of high school graduates who received money for graduation received up to $500 as part of their gifts, according to a National Endowment for Financial Education poll. Thirty-eight percent received more than $500.

Help your teen manage that money wisely by following these tips, provided by Tami Rechtenbach, director of member services at Dupaco and the mother of a Hempstead High School senior preparing to graduate:

Practice saving. Help your child determine how the money will be used. If some of it will go toward books or that first tuition bill, keep it liquid in a savings account. Otherwise, consider a one-year CD.

Communicate. Let your child know how much her college education will cost - and what her contribution will be. Help her determine how much she will need to save each week.

Exercise self-control. Teach your child to separate needs from wants. "An iPad might be really cool, but it won't do that term paper for you," Rechtenbach says.

Don't always bail them out. "If you constantly give your kids money every time they need it, you're doing them a disservice," Rechtenbach says.

Start early. Even if your child isn't graduating yet, start talking and estimate how much that college education will cost with the Home & Family Finance Resource Center's college calculator.

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