When her son recently turned 18, Lisa Kirchenbauer and her husband had him sign papers to take control of an account for minors they had long ago set up as a college fund -- which had grown to about $60,000.
"What if I ran out and bought a car with it?" he asked.
It was mostly a joke question, but still heart-stopping for Kirchenbauer, a financial planner in Arlington, Virginia, because she knew he could do exactly that if he wanted to -- and it would be perfectly legal.
There is a jarring lack of parental control when high school and college seniors come into some cash upon graduation -- anything from a $100 check from Grandma to multi-million dollar inheritances.
"You have to go for less of a parenting, finger-pointing mode and talk to them as an adult - that's what they are now," says Rachel Cruze, who co-authored the book "Smart Money, Smart Kids" with her father, financial guru Dave Ramsey.
Mostly, good things happen with the money. According to college loan purveyor Sallie Mae, about 25 percent of parents say that at least some high school graduation gift money ended up paying for college expenses. A 2010 poll for the National Endowment for Financial Education found that 25 percent of recipients put money into savings, 10 percent used it for travel and entertainment and 5 percent put the money toward a car.
While it's still a little scary for parents to lose control, here are four strategies to make sure that new young adults handle graduation gifts responsibly.
Test With Small Amounts
Many parents try to teach their kids healthy spending habits with allowances, which pays off when they hit young adulthood. Jill Totenberg, mom to a high school senior in New York City, started her daughter off with $5 a week in third grade, then upped it to $80 a month in high school.
Now, the 18-year-old has a bank account with a debit card and is learning to manage a credit card. Mom is pretty confident that any graduation gifts will go straight in the bank. "She totally gets it," says Totenberg.