What Should You Do with Your Graduation Money?

by Andrew Schreiber 21. May 2013

Graduation Money

Graduation is on the horizon for many high school and college students. That means there are many things to look forward to - one being graduation money! Having been a broke college student not too long ago, I know of the desire to blow it all on a summer vacation, a new car, or partying. Graduation marks many peoples’ entrance into the “real world,” and that can be a scary thing. We have to start thinking about our mounting debt, finding a job, and becoming financially independent. Although the smart things to do with graduation money are not always the most attractive or fun options, they can help ease your mind and provide some comfort. Below you will find some suggestions as to what to do with your graduation money.

Save

Graduating from high school is often the first time we receive a large sum of money, and it can be very tempting to blow it all on fun things. However, before you do anything else, this is a great time to open your first “adult” bank accounts. Personally, this was when I opened my first bank accounts; I opened both a checking and a savings account after my high school graduation party. Banks often have some good account options for people newly entering adulthood. Parents, this is a good opportunity to teach your new graduate about earning interest and the importance of beginning to save at a young age.

Graduating from college means you are entering the “real world” and you need to be more aware of the uncertainty that could lie in your future. Having an emergency fund is very important in order to be financially secure. No one can predict the future, so having money set aside just in case is definitely a good thing. Losing a job, medical issues, or car troubles are all examples of things that could potentially happen that we should be financially prepared for. These are all stressful situations, so having an emergency fund set aside to provide a financial cushion is both comforting and important for the future.

Buy Something Useful

Graduating from high school is a big accomplishment, but it is not the end of everyone’s educational career. In the fall you may be going off to college, so why not use some of the money to purchase something useful for this next chapter in your life? Spending money on something you will need in college can be important as well as fun - like a laptop or tablet. Some less fun (yet important) suggestions are textbooks or a new suit for job interviews.

Pay off Debt

I think we can all agree - receiving money as a college graduation gift is one of the most needed gifts anyone could give you. One of the best things to do with the money is pay off your most expensive debt. When I say expensive, I mean the debt that has the highest interest rate - not necessarily the highest balance. Typically the most expensive debt college students have is credit card debt followed by private student loans. Paying off a large sum of debt can be very relieving which can energize you to want to pay off the rest sooner!

Open a Roth IRA

This is another option that really promotes the importance of saving money. A Roth IRA is a good option for younger individuals to start saving for retirement. Now I know most of you are thinking, “I JUST graduated…why do I need to think about retirement?” Well, the best answer I can give you is two words: compound interest. Investing $100 at age 18 at an expected return of 8%, your $100 investment will be worth over $3,300 when you’re 65 years old. See why it’s so beneficial to start saving early for retirement? Opening a Roth IRA is a good idea for high school graduates or current college students. The contribution limit makes it a good investment for younger people.

Splurge

Yes, it is recommended to get in the habit of saving early and saving often, but that doesn’t mean that you shouldn’t be allowed to spend ANY money on yourself right now. So take a percentage of the money you receive from graduation (maybe 10-20%) and use it on whatever you want! Go out with your friends who will soon be moving on in different directions, or go on a shopping spree. Using some of the money for something fun will hopefully show that you can have a good balance of having fun and being responsible. Saving money for the future does not mean you have to sacrifice enjoying life today; just remember - you don’t need to enjoy life too much!

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1st Mariner Featured in U.S. Army PaYS Program Testimonial Video

by Stacy Tharp 16. May 2013

Last year, 1st Mariner Bank utilized its partnership with the United States Army Partnership for Youth Success (PaYS) Program with our first recruit, Ciara Brown. A former Chemical Operations Specialist in the Army Reserve, Ciara was hired as a teller at our Cockeysville branch. The PaYS Program is committed to assisting Soldiers in securing their future once their service to our country is complete. Their website describes the program as a "win-win-win" for the Army, the Soldiers, and participating partners like 1st Mariner.

PaYS recently shot a video testimonial of Ciara and branch manager Kathy Scott at our Cockeysville branch. The video is featured on their homepage, and they were nice enough to allow us to share it as well!

 

 

We thank PaYS for thinking of us for this testimonial and look forward to continuing our partnership!

The Life of the Business

by Elizabeth Sherman 15. May 2013

Business Insurance

A few years ago the air conditioner in my car started making very ominous groaning sounds which I was a little slow to hear on account of the fact I cannot drive without the radio blasting at ear splitting decibels. By the time the groaning turned to sickening grinding and hot air began spewing out of the vents, I knew things were beyond hope. Not having air conditioning in August was bad enough, but the thought of taking my car to the dealer and paying to replace the entire system made me break out into a real sweat. I began asking around at work to see if anyone knew of a local mechanic who would look at the situation and not charge me 3 months’ worth of mortgage payments. A coworker gave me the name of a mechanic who diagnosed the problem (I did not need to replace the whole system!!) and only fixed what was wrong. I was able to escape the whole episode for the cost of my normal monthly cable bill – quite a relief.

From that day forward, I have taken my car to the same mechanic. His shop is not conveniently located near my house or my office; as a matter of fact I have to rent a car every time I go in for service. However, Rick knows my name; knows my car; doesn’t fix what’s not broken and never goes by the standard hourly charge. I trust him and have referred many friends to him.

The economy has taken a toll on his business but his doors remain open. But every once in a while, I wonder what will happen to the business if something were to happen to him. Does he have a plan to cover the expenses of the business should he be injured (on the job or off)? What if he dies unexpectedly? Will his family have enough money to survive without his income? Is there someone to take over business?

While all of these questions should be asked, they are frequently not addressed. Whether it’s because the topic is too morbid or no one ever thinks something bad is going to happen, planning for the continuation of a business is not glamorous, but it is necessary. If you get injured on the job, how are you going to make sure the day-to-day expenses of running your business are covered? How is your company going to survive if the person who brings in the most business suddenly dies? What happens to the business if you, as the owner, suddenly die?

It's for these situations that life insurance products such as Business Overhead Insurance, Key Man Life Insurance, and Buy Sell Agreements were invented. All of these products provide protection for the business itself and the family members left behind should something happen to the heart and soul of the business – YOU!

Waiting until something happens is too late. Take a look at your business now and see what plan you have in place for the future.

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