By Claudia Buck The Sacramento Bee
What to give the newly minted graduate? Here are some money-smart ideas from financial experts.
1. CASH IS KING, BUT
It’s probably the most-wanted gift, but also the easiest to fritter away. If your son or daughter is sitting on a stash of checks, have a conversation about how that money should be spent. “You want to guide them. Sit down and have a conversation with your graduate,” said Rachel Cruze, co-author of a new book, “Smart Money Smart Kids.” “Encourage them to have a little fun with the money, but also to set aside some for the future: college expenses, life expenses.”
For a new college graduate, it might be helpful to set aside some grad money for tuition or paying down student-loan debt. “Even if it’s only $1,000, that’s a thousand you don’t have to pay back with interest,” said Cruze, a Nashville resident whose father is personal-finance guru Dave Ramsey.
With cash, she notes, it’s so easy to waste it. Be intentional. Have a plan.
2. YES, THE GIFT CARD
Gift cards are the easiest and most practical gift, especially when they’re to stores or places that young grads need: say, Target or Bed Bath &Beyond for dorm-room essentials. Or to the campus bookstore to help offset the cost of buying textbooks and supplies. For those entering the working world, it could be a gift card for a favorite grocery store, coffee shop or to a retailer like Macy’s or Men’s Wearhouse for a post-college wardrobe upgrade.
3. GET OUT OF DEBT
If you’re planning to give cash, consider earmarking the money to pay down a student loan or credit-card debt.
“Helping your graduate reduce that burden will enable them to focus their resources in other areas, such as saving,” said Jean Towell, manager of TheMintGrad.org, an online site geared toward college students and graduates.
And while it isn’t exactly a heartwarming idea, she also suggests a subscription to a credit-monitoring service to emphasize the importance of a good credit score.
4. GIFT OF GOOD ADVICE
In a recent Northwestern Mutual survey, almost a third of millennials — those ages 18 to 29 — said they don’t know where to find help in managing their money. Giving them a session with a certified financial planner could be the gift of good advice.
“Introducing a grad to an experienced adviser who can assist with comprehensive planning — whether paying off loans or building a nest egg — will encourage good financial habits and support long-term financial security,” said Towell, who responded by email while traveling to a family graduation event. “What more can any parent or grandparent want?”
5. HELP WITH WORK WORLD
Some of the best gifts are those that help a new graduate enter the hypercompetitive job market. J.M Henderson, a financial blogger and Forbes.com contributor, suggests paying for their membership to a professional association related to their major. It’s “a gift of access,” Henderson said. “Grads get the opportunity to network with others in their field (including potential mentors), participate in professional development opportunities and get access to relevant job postings.”