From Cap and Gown to Cash Flow: Practical Financial Gifts for College Graduates

When your child graduates from college, you’ve reached an important milestone. You’re hopeful for their future and want to help get them started the right way.

Here are some suggestions for practical financial gifts for the college graduates in your family.

Investing

An excellent way to ensure the financial future of your newly graduated child is to teach them the basics of sound investing. Here are gifts you could consider:

• Stocks: Consider gifting shares of a well-established company or a diversified exchange-traded fund (ETF) that aligns with their interests and goals.

• Mutual Funds: These professionally managed investment vehicles allow graduates to diversify their portfolios and potentially earn higher returns.

• Real Estate Investment Trusts (REITs): REITs are investment vehicles that allow you to invest in real estate without owning any physical property. REITs own and operate income-producing real estate (shopping centers, office buildings, apartments, and hotels). When you invest in a REIT, you buy shares in a company that earns income from real estate investments. The income generated by the REIT is then distributed as dividends. REITs can offer a steady revenue stream, potential for capital appreciation, and diversification benefits.

Budgeting Tools

Budgeting is essential because it keeps track of income and expenses and will help your college graduate make informed financial decisions. By creating a budget, they can identify areas where they may be overspending and adjust their spending habits.

Budgeting will help them save money, pay off debts, and plan for future expenses. It’s an essential skill for financial success and will help them achieve their long-term financial goals.

• Personal Finance Apps: Encourage graduates to use apps like YNAB (You Need a Budget) or PocketGuard to track their expenses, set financial goals, and manage their finances.

• Gift Cards for Budgeting Courses: Many online platforms, like Udemy, Coursera, Skillshare, and LinkedIn Learning, offer courses on budgeting and financial planning.

These courses can benefit new college graduates who often enter the workforce with limited financial knowledge and experience. They can learn how to manage their finances, create and stick to a budget, and plan for their financial future.

By taking advantage of these online platforms, new college graduates can equip themselves with the tools they need to succeed financially.

Expense Tracking Notebooks: Using physical notebooks specifically designed for tracking expenses can be a helpful tool for new college graduates to develop good financial habits.

Writing down expenses manually can help them keep track of their spending and identify areas where they may be overspending. It can also serve as a visual reminder of their financial goals and help them stay on track with their budgeting plans.

The choice between physical notebooks and digital apps depends on personal preference and what works best for each person.

Career Development Resources

Consider these gifts to help college graduates excel in their professional lives:

• Professional Development Courses: Gift certificates for online courses or workshops can help graduates enhance their skills and stay ahead in their chosen fields.

• LinkedIn Premium Membership: A gift of a LinkedIn Premium membership can be helpful to a new college graduate because it offers access to valuable networking opportunities and job search features. With a premium membership, graduates can send InMail messages to recruiters and hiring managers, access insights on who has viewed their profile, and gain access to online courses and certifications that can help them enhance their skills and knowledge. Premium membership also allows graduates to see how they compare to other applicants and may increase their chances of being noticed by potential employers.

• Professional Association Memberships: Pay for a one-year membership to a relevant professional association that can provide graduates with networking events and industry-specific resources.

Financial Planning Tips

Financial planning is a vital skill that college graduates should develop early on. Consider these gifts to help them kickstart their financial planning journey.

• Books on Personal Finance: Many popular books on personal finance can provide valuable insights and tips for college graduates. Some of the most widely read books in this genre include:

o The Millionaire Next Door by Thomas J. Stanley and William D. Danko
o Your Money or Your Life by Vicki Robin and Joe Dominguez
o The Bogleheads' Guide to Investing by Taylor Larimore, Mel Lindauer, and Michael LeBoeuf
o The Psychology of Money by Morgan Housel
o I Will Teach You to Be Rich by Ramit Sethi
o The Richest Man in Babylon by George S. Clason

• Consultation with a Financial Advisor: Arrange a session with a CERTIFIED FINANCIAL PLANNERTM professional who can provide tailored advice and create a financial plan.

• Retirement Account Contributions: Encourage employed graduates to start saving for retirement by helping them open a retirement account and gifting them funds to contribute to their Individual Retirement Account (IRA) or offset income deferred to a 401(k) plan.

Final Thoughts

As college graduates enter the workforce, practical financial gifts can positively impact their future. By investing in stocks or mutual funds, providing budgeting tools, supporting career development, and offering financial planning tips, you can equip them with the tools they need to succeed financially.

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