Paycheck Chronicles

Grad Gifts That Will Pay Off

Well, it’s that time of year. The landscape is turning spring green and restlessness abounds as college and high school graduations are right around the corner. It’s a reason for celebration, right? Well, leave it to a financial planner and soon to be empty nester to ask you to put those massive blowout party plans —and the dollars associated with them – on hold for a more practical, and ultimately more useful approach to graduation gifts.

Here are three savvy gift ideas for your kids (or grandkids…which is another hat I now proudly wear):

Sign’Em Up For Summer School

I know, they won’t really want to think about school when they’ve just graduated. However, a short personal finance course at a local community college or a home school session can pay long-term dividends. I’m not talking an economics course, just the basics. For example, visit annualcreditreport.com and help them request their first credit report. While you’re at it, visit the education center at www.myfico.com so they can learn and understand what goes into this all-important, three-digit number. Discuss budgeting and include a first draft budget as a homework assignment. Find a calculator on-line and have a quick session on the time value of money and compounding to start them in the right financial direction.

Kick Off Their Savings Plan

If the graduate had income during the year consider setting up a Roth IRA and investing in a mutual fund for as little as a couple of hundred dollars. This is a strategy we rolled out at our house. Or maybe it would it make more sense to deposit that money in a savings account to serve as their first emergency fund? Don’t just write the check, have the discussion about what a big difference a little saving can make.

Buy Practical

Okay, some of you are probably scoffing at options one or two or maybe both. You know you’re going to get your grad something, why not shoot for gifts that will help get him or her off the family payroll. Some furniture for their first home-away-from-home, a bicycle for college transportation, a fuel card to gas-up, or a new business suit/outfit for that first job interview are all examples of the practicality I’m preaching.

Their thanks maybe subdued today, but if you view graduation gifts with an eye to the future, you might be helping to put your graduate on the road to financial success.

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