After four long, tough years in college (and at least 12 years in school before that!), it’s nice to get recognized for your accomplishments- both through receiving your diploma and any graduation money you might get as a gift from loved ones. That nice, tidy sum your loved ones give you can be an incredible gift when you’re out on your own for the first time.

When you’re new to handling your finances, a large sum of money can be a bit intimidating to deal with, and it’s far too easy to blow it all at once. After all, you’ve worked hard. You deserve something nice, right?

You do! But there are responsible ways to spend that money that can help you establish a nice savings as you start your adult life. You stand to benefit for years to come if you invest that money wisely — in yourself.

Here Are 6 Smart Ways to Spend Graduation Money

Pay Down Debt. Your first student loan payment will be due before you know it. Or maybe you racked up some credit card debt while in school. Start getting rid of any accumulated debt by using your graduation money to pay down some or all of your balance. You stand to save hundreds or even thousands of dollars on interest payments by paying down your debt as quickly as possible.

Create a Buffer for Emergencies. When you first begin working, it can be tough to build up emergency savings, and you should aim to save three to six months of living expenses. Your graduation money can become your emergency savings. More than half of Americans can’t afford a $500 emergency and are just one unexpected car repair or medical bill away from credit card debt.

Start Your Retirement Savings. If you’ve gotten a job and already have emergency savings, turn your attention toward saving for retirement. You can open a Roth IRA and fund it with your graduation money, so long as you have earned income (up to $5,500 per year in 2017). Beginning to save for retirement at an early age will give your savings a long time to grow, in turn giving you a better chance of a secure, comfortable retirement.

Set Yourself Up. You may have a new apartment to furnish and a new job to dress for. Use that graduation money to buy items you need around your home, or build a wardrobe of timeless, quality work clothing. You’ll enjoy these items for years.

Continue Your Education. Just because you’re done with school doesn’t mean you’re done with learning. Invest in classes that interest you — whether you want to learn a new language, gain some coding skills or join an improv group. As an added bonus, taking a class is a great way to make friends when you’ve just moved to a new city or network for future career opportunities.

Treat Yourself, Responsibly. What’s a fun goal you have for yourself? Maybe it’s a big trip every year, or a list of 100 restaurants you want to try. Use some of your graduation money toward these goals.

…and One Thing You Shouldn’t Do

Give in to Lifestyle Creep. When buying something new comes with higher ongoing expenses, think long and hard before making the purchase. You might need a car, but does it have to be a brand-new luxury vehicle? You need to live somewhere, but does it need to be a top-floor one-bedroom in a fancy building with lots of amenities?

Right after college, try living like a broke college student for as long as possible, while saving as much money as you can:

  • Drive a used car (or ditch the car in favor of public transit).
  • Live with roommates or rent a studio apartment.
  • Learn to cook simple, healthy meals.

As you get older and your salary increases, spending more will become even more tempting, so put some good habits in place today.

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