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

A woman smiling in a college graduation cap and gown.

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

Key points

  • An IRA contribution can build the foundation of a strong retirement plan.
  • Take the learning outside of 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 in hand. Give your graduate a gift that will keep on giving for years to come. Here are three great gifts to consider.

1. Give their IRA a boost

Just because your graduate has earned income doesn’t mean they can afford to put it away for the future. The gift of 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%, a $500 investment today could grow to over $30,000 by the time a new graduate is ready to retire.

Want this cash to go even further? Consider saving it in a Roth IRA. With a Roth IRA, retirement savings can grow on a tax-free basis, potentially leading to thousands of dollars in tax savings down the road. Most graduates are below the phase-out threshold for contributions, and may be in the lowest tax bracket of their working lives.

2. Give the gift of knowledge

While your graduate 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 on the cusp of their earning years.

Is your graduate interested in investing? Check out these 6 Great Books for Investors

Most personal finance books cover the core concepts of financial wellness, from earning to spending and saving to investing. However, certain books are more suited for certain readers. Your Money or Your Life by Vicki Robin and Joseph R. Dominguez is one of my favorite all around finance books, but a recent medical school graduate might relate better to The White Coat Investor by Dr. James Dahle. Alternatively, if your graduate is more interested in the behavioral side of finance, Dollars and Sense by Jeff Kreisler and Dan Ariely is a great read.

3. Bring in the experts

For something as personal as personal finances, it often makes sense to meet with a professional who can customize a plan to your graduate’s situation. A financial advisor can provide a wealth of knowledge, from budgeting and investing to making the most of new employee benefits. For a graduate entering the working world for the first time, a roadmap to financial success can be an invaluable tool during a time 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. Otherwise, there are many advisors who cater specifically to recent graduates by offering products such as a financial advice grad pack. Expect to pay upwards of $200 per hour for these services, which can come in prepackaged or hourly billing arrangements. Entering the working world is an incredible opportunity to build and refine financial skills, and the advice of a financial planner can guide the way.

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