What to Give the Graduate who has Everything… or Nothing
Graduation day is here. The day that you long dreamed for your son or daughter. They are beginning their new journey to college or from college to the working world. Your excitement gives way to the question: What do I get them for Graduation? If you look online, every grad gift site suggests a personalized gift but how many personalized gym bags, pens or leather portfolios can a person use? Consider giving them a personalized gift that will last far longer than the missing pen, dirty gym bag or dust collecting portfolio.
For High School Graduates consider:
- A Detailed Budget. Work with your financial planner to create a budget for your child as they enter college. A good plan will help them break down their expenses by those that occur each term (tuition, meal plans, fees, books), those that occur monthly (rent, insurance, etc.) and those that occur weekly (food, gas, etc.). Help them budget a set amount for each meal and snack so that they do not end the quarter eating cereal for the last two weeks.
- A Credit Card. What? Have I lost my mind? No. Help them apply for their own credit card with a low (that bears repeating LOW) credit limit. Have the family’s home address as the address the bill comes to and then review the bill with them monthly. This will teach them to use credit while they are building up their own credit score. With a low credit limit, even the mistakes they make at this point are ones that they can learn and recover from.
Great Gift’s for your College Graduate:
- Start an Investment Program. This is a perfect time to teach them to invest. Give them a set amount to invest each month for a period of time (1-3 years) and offer to help them invest it (or have them meet with your financial planner to have them help). Remind them this is an investing plan and that if they use it for current needs the funding goes away. They have plenty of time to recover from investing mistakes and seeing even small amounts grow may spur them on to saving and investing early
- Buy Them Life Insurance. Insurance rates will be the lowest for them while they are young and healthy. Buy enough insurance to pay off their debts (credit cards, student loans, etc.). A $100,000 30 year term policy for a healthy 21 year old will cost around $140-$175 per year. Buy them the policy, agreeing to pay the premium for a set period of time until they earn enough to take over the premiums. This will help keep the cost of insurance down as they move into marriage and having children.
- Help Pay Down Student Loans. Rather than footing the bill for an expensive gradation trip, an extra payment on a student loan can reap large benefits down the road. Consider a recent graduate with $75,000 of outstanding student loans. A $5,000 payment on their student loan now can reduce their total payments by an additional $4000 on a 10 year loan.
While these gift ideas might not look as pretty as a fancy pen or a trip to the beach, they will impact your children far longer. Who knows, they may even thank you for it- way later in life of course!
–Mike Mungenast, Sr. Vice President, Senior Advisor
Vision Financial Group
4505 Pine Tree Circle, Birmingham, AL 35243
205-970-4909, www.vision-financialgroup.com
Investment advisory services offered through Investment Advisors, a division of ProEquities, Inc., a Registered Investment Advisor. Securities offered through ProEquities Inc., a registered broker-dealer and member of FINRA and SIPC. Vision Financial Group, Inc. is independent of ProEquities, Inc.
