PALM DESERT, Calif. - -

It's that time of year again-graduation season!

For most teens and young adults, the surge of cash they receive to commemorate their graduation achievement will be the largest amount of money they've had to manage.

Here are some ideas to share with your graduate about what to do with their cash.

  • Splurge A Little- Take 10% or so of what you receive and go to the mall, a concert, or maybe Disneyland. All the hard work to graduate high school or college should be rewarded.
  • Save Some- Graduates will need to put into action some basic financial principles they've learned, like creating a safety net in case of emergency. Look for a bank or credit union that pays some interest.
  • Pay Down Debt-The average college graduate has $24,000 in student loans and $4,000 in credit card debt. Start by paying down the highest interest rate cards first. Consider this: $2,000 in credit card debt at 18% interest will take over 5 years to pay off at $50 a month. It will also cost you over $1000 in interest.
  • Invest- The best way to overcome fear, is to jump in. Consider mutual funds through a ROTH IRA, for example. $1,000 in a fund that earns 8.7% after fees will mean $28,000 in 40 years. If you invest $5,000 a year for 40 years, you'll have $1,403,905 (assuming 8% return.)
  • Go On a Trip- Your life will only get more complicated, so travel when you're young. Experience someplace you've never been.
  • Rethink the Brand New Car- If you need wheels, consider a gently used car vs. a new car. You'll save $1,000s of dollars and still have a good investment.
  • Don't Spend Money Just Because You Can- Realize that now is a great time to start off on the right foot with your financial future. The economy is still uncertain, so continue to live like you're in college, at least for a while, may make sense.

-- Cathy Brown, CB Wealth Management