Millions of American young adults are graduating from college this season and beginning the next chapters of their lives.

The ceremonial celebrations of graduations often come with receiving gifts of congratulations from family and friends. Many gifts are money.

New grads may be tempted to spend their gift money — but is there a better strategy to invest or bank this money for future use? 

Three money experts shared wisdom, insights and guidance about whether college grads should save or spend their gift money — and the specifics involved. 

After four years (or more) of studying, most graduates are now joining the workforce and paying their own way in many cases. 

An understanding of personal finance is important for new college grads. 

Here are areas in which gift money can be helpful.

After graduation, spending money toward housing, apartments, a car or another means of transportation can significantly impact graduates' financial stability and quality of life, said Adam Davis, vice president of financial health and liquidity at Capital One, based in Philadelphia.  

"You can use the gift money for a security deposit on an apartment or to start or boost your down payment fund for a car to minimize or avoid the need for financing and reduce future monthly payments," he said.

Graduates will need to get into a professional mode fairly quickly — so using gift money toward the needs of a new job can be a smart money move. 

"Spending on the essential home office components can be pertinent to your productiveness and success."

"As companies continue to embrace hybrid work models, spending on the essential home office components can be pertinent to your productiveness and success," Davis told Fox News Digital. 

"This can be items like a desk, a comfortable chair or a monitor to use for your WFH days, allowing you to use your money to make working more comfortable." 

It might be worth investing in dual-purpose supplies, such as headphones that can be used for both work and personal use, he said.

Having a professional wardrobe such as versatile suits or dresses can boost your confidence and convey positive first impressions during interviews and in the workplace, said Davis. 

Allocating some gift money toward a few classic and professional staples may be very smart.

To that point, allocating some gift money toward a few classic and professional staples may be very smart.

"Be on the lookout for sales or outlet stores that can give you the best value for your money depending on your budget," Davis suggested. 

Your personal growth is one of the best investments you can make, as it opens doors to better career opportunities, said Jennifer Seitz, a certified financial education instructor and director of education at Greenlight in Atlanta, Georgia. 

Whether it’s tuition for graduate school, online courses or certifications, investing in education can enhance your future earning potential and job satisfaction, she said. 

"You can start by setting aside a portion of your gift money specifically for that purpose," Seitz said. 

If you accumulated any credit card balances during the college years, putting graduation gifts toward reducing or eliminating that high-cost debt can get your financial life on a better footing as you embark on your career, said Greg McBride, chief financial analyst with Bankrate.com, based in Palm Beach Gardens, Florida.

Although college grads may be tempted to use their gift windfalls to take a post-grad vacation or splurge on gadgets and gaming consoles, saving money is a way to plan and protect your finances, experts say. 

"By saving gift money, it can be a jump start to achieving financial stability and preparing for future needs like buying a home, purchasing a car or cushioning a contingency fund," Davis said. 

. Having an emergency fund is a financial safety net for those unexpected expenses like a sudden car repair or medical issue. 

"It’s important to open a separate, easily accessible savings account dedicated to emergencies," Davis said.  

When opening a savings account, he suggested finding banking products and services with competitive interest rates, no fees and no minimums that work best for you and your financial goals. 

"Typically, three to six months’ worth of living expenses is the recommended amount to have on hand, and this graduation money can help get this fund started," Davis said.

A great and reliable choice, especially if you have extra gift money that you don’t need immediate access to for several months or years, is a CD.

It's a good bet depending on your financial goals. 

"Anyone can open a CD account and you can benefit by increasing your gift money in a reliable and secure way," said Davis. 

Money experts say retirement planning should start when a person starts a first job. 

For instance, he said Capital One 360 CDs offer a fixed rate and guaranteed returns that aren’t subject to market changes.

. Your 20s may not be the time to think about your golden years — but money experts say retirement planning should start when a person starts a first job. 

"Take advantage of an IRA or company-sponsored 401K to start building your retirement savings early and bring these habits into your payday routine," said Davis. 

Another use for gift money for the future is a Roth IRA to jumpstart retirement savings. 

"A $1,000 investment made now will grow to more than $18,000 over the next 50 years, at a modest 6% average annual return," said McBride with Bankrate.

The "split, spend, and save" approach is a practical way to manage and allocate your money. It ensures there’s an immediate balance between your needs and your wants as well as identifying your short- andl long-term goals, noted Davis with Capital One.

Here are a few tips on how to implement this strategy.

It’s important to categorize your money into specific groups, which can help you organize and budget your finances to create a viable money path and plan. 

"When determining how you make this split, you’ll want to reflect on where you are in your savings journey and where you may need to save more," Davis said. 

Based on this, he said you can split your money — a common breakdown is 50% for savings, 30% for spending and 20% for investing — but this will likely vary depending on your individual goals and personal progress. 

Establish current priorities and necessary expenses first — like rent, groceries and bills. 

Once the essentials are covered, only then consider spending the remaining amount on the areas that can benefit you, such as work supplies, a professional wardrobe, or housing and transportation, Davis indicated.

Determine how much money you’d like to save toward your emergency fund. 

Saving builds financial security and prepares you to meet your short- or long-term goals. Determine how much money you’d like to save toward your emergency fund, short-term goals like a new vehicle, and long-term goals like retirement planning. 

For the spending portion, focus on making purchases that add value to your quality of life or personal goals, said Seitz with Greenlight. 

"Make it enjoyable and also meaningful," she advised. "Remember, finding the right balance sets you on a path toward financial empowerment and stability."