3 Great Gifts for the Money-Conscious Graduate in Your Life

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Looking for a grad gift that will go further than a check?


Key points

  • A contribution to the IRA can lay the foundation for a solid retirement plan.
  • Take the learning outside the classroom with one of our favorite personal finance books.
  • Make it personal by arranging a meeting with an expert who can provide sound, objective advice.

Graduation gifts can be many things: a sign of support, an investment in the future, and even a learning experience. This year, don’t settle for cash. Give your graduate a gift that will keep on giving for years to come. Here are three great freebies to consider.

1. Boost their IRA

Just because your graduate has earned an income doesn’t mean they can afford to put it aside for the future. Giving a contribution to an Individual Retirement Account can go a long way toward a brighter retirement. In fact, with an assumed annual growth rate of 10%, an investment of $500 today could grow to over $30,000 by the time a new graduate is ready to retire.

Want that money to go even further? Consider saving it in a Roth IRA. With a Roth IRA, retirement savings can grow tax-free, which could result in thousands of dollars in tax savings down the road. Most graduates are below the contribution phase-out threshold and may find themselves in the lowest tax bracket of their working lives.

2. Offer the gift of knowledge

While your grad is in learning mode, why not give them one last reading assignment? A personal finance book can help build strong financial habits when a graduate is about to earn a living.

Is your graduate interested in investing? Check out these 6 great books for investors

Most personal finance books cover the basic concepts of financial well-being, from income to expense, and from saving to investing. However, some books are more suitable for certain readers. your money or your life by Vicki Robin and Joseph R. Dominguez is one of my favorite books on finance, but a recent med grad might understand better The investor in a white coat by Dr. James Dahle. Alternatively, if your graduate is more interested in the behavioral side of finance, dollars and common sense by Jeff Kreisler and Dan Ariely is a great read.

3. Call in the experts

For something as personal as personal finances, it’s often a good idea to meet with a professional who can customize a plan to suit your graduate’s situation. A financial advisor can provide a wealth of knowledge, from budgeting and investing to optimizing new employee benefits. For a graduate entering the workforce for the first time, a roadmap to financial success can be an invaluable tool in times of change.

Learn more: The Best Financial Literacy Apps for 2022

If you already have a financial advisor, ask them to meet with your graduate one-on-one to create a financial plan. Alternatively, many advisors cater specifically to new graduates by offering products such as a graduate financial advice pack. Expect to pay upwards of $200 per hour for these services, which can be pre-packaged or billed by the hour. Entering the working world is an incredible opportunity to learn and hone financial skills, and the advice of a financial planner can guide you.

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