Do you have someone in your life who is graduating this spring? The form and function of graduation gifts can be sticky territory. It’s important to consider not only the level of degree being attained but also the personal traits, interests and ambitions of new grads to ensure your gift will enhance their life.
High School Graduate
High school graduates, specifically in this immediate gratification era, like something they can use right away. This is especially true if it’s cool and somewhat unique among their peers, such as an Apple watch. This generation also likes to do its own shopping. They’re not limited to the mall and fashion magazines — they are influenced by ads, celebrities and “influencers” all over the globe, and they can order anything they want online. You may consider a prepaid credit card or gift card if they have a favorite store. This type of present lets you align the cost of the gift to how personal your relationship is to the grad and still offer a valuable gift they’ll enjoy.
If your high school grad is college bound, think about gifts/gift cards to help decorate their dorm room or apartment, or buy technology they can use during this time. This type of gift also takes some financial heat off the parents, since it may be something they’d have to buy anyway. Consider ideas like a portable charger/power bank, Bluetooth speaker or noise cancellation headphones, in case they live in a noisy dorm or want to listen quietly to their own music at all hours.1 Another idea is to pay for an annual Amazon subscription and/or a prepaid gift card. The subscription not only gives them fast, free delivery but also access to Amazon Prime music, movies and TV series, as well as limitless cloud storage for their smartphone photos.2
Grandparents in particular may want to contribute to the cost of going to college, buying a car or renting an apartment. Consider seeding a savings account or prepaid credit card to help them establish credit history. If the grad is taking a gap year, perhaps choose a high-end backpack for traveling or a prepaid gas card to help them get to and from a job.3
If you live on a fixed income, remember that some life insurance policies and annuity contracts allow you to take limited cash distributions each year. If you anticipate needing ad hoc cash during retirement, we’re happy to discuss various insurance options to ensure you have extra funds when you want them. Call us for more information.
A college grad may have many needs as she makes the big step from the relatively sheltered world of academia to “real life.” It may be the first time she rents her own apartment or moves to a new city. You might consider a subscription to Amazon Boxes, which offers regular deliveries based on personal proclivities — from tea lovers to pet owners.4 If the grad is setting up a new household, consider gifting a small toolkit, kitchen appliance, home store gift card or office supplies gift card if they’ll be working from home.
A busy young professional might appreciate a subscription to one of the popular meal kit services. These kits deliver a set number of meal plans/serving sizes and include the specified ingredients and instructions to cook at home. It’s a great way to encourage healthy eating as well as help your young adult learn to cook.5 If your new grad is a fitness guru, consider gifting a membership to a gym near where he lives. The costs of streaming services tend to add up, so consider paying for an annual subscription to a service like Netflix, Hulu or Spotify.
Not every entry-level salary allows young adults to splurge on luxuries. Think about their interests and something you can give that they wouldn’t be able to afford for a while, such as season tickets to a sporting event or live theater.
If your new graduate has time off before starting a job, you may want to gift a vacation. If you have credit card rewards points, you could use them for hotels/flights or even coordinate with other parents to spring for an Airbnb for your graduate and her friends.
When in doubt, you can never go wrong with cash. It’s easy, scalable and provides instant gratification. A big smile and a hug go a long way, as well.
We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice.
The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.