Gifts to Really Help Out Your Grad

Graduation caps, blocks, money, diploma

Want to get a great gift for your grad? Support their financial literacy!
Image: Shutterstock

A college-bound high school grad is beginning so many transitions all at once: Many are moving out for the first time or looking for their first job. High school may have prepared them for college, but it does a notoriously bad job of preparing them for one particularly hazardous facet of their adult life – taking control of their own finances.

There are a lot of things a concerned parent can teach their teenager about money, but USA Today interviewed a number of financial experts on just one thing; what gifts they would give a graduating family member to help kickstart their smart money choices. Here’s a summary of those gift ideas:

  • Pay for them to have a good, long appointment with a one-time financial adviser. These experts can look at your student’s normal standards of living and give them advice on budgeting, sticking to a savings plan, or even investing. This is particularly valuable if your student already has a job and therefore a good idea of their typical paycheck. And an adviser recommending a course of action has more weight than suggestions from Mom or Dad. The basics you might ask an adviser to cover are compound interest, mutual funds, credit scores, and IRAs. (Caveat: Advisers can be very black and white about the dollar cost of dreams. Be prepared to firmly support your student if/when the adviser tries to steamroller a statistically high-earning path over your student’s own dreams.)
  • Buy them a small amount of stock. With smart phone apps, it’s easier than ever for your graduate to track the stock value and watch their stake (hopefully) grow. With their own money in the pot, they’ll pay enough attention to learn how the market works. Ideally, pick a company they already love. Apple, Google, and Disney are highly visible and very popular.
  • Invest in a Roth IRA for them. Current graduates who have been paying attention to the state of the world all have at least some worry about Social Security and their distant retirement. That worry’s not unfounded, according to many financial advisers. The earlier they begin investing and saving, the better. A Roth IRA grows tax-free, and if allowed to grow untouched, the compounding earnings can be substantial.
  • If your graduate already has debt, an increasingly common reality, paying it off for them would be the best possible gift. Interest on debt is always higher than interest on savings, meaning that any debt they have more than cancels out any money they may accrue. Don’t let them start their adult life already underwater.

You want your student to succeed and to not have to stress about their finances. So teach them the right skills early, and if you can, give them a big boost forward.

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