Posted by: Dennis Hinkamp on May 23, 2012
Financial Advice for Recent Graduates
|Utah State University Extension professor in family and consumer sciences|
|Utah State University Extension writer|
Sound Financial Advice the Best Gift for Grads
LOGAN, UT – It’s again the time of year when graduation announcements begin to filter through the mailbox. Whether the graduate is from high school, college or a technology school, it can be difficult to know how much to spend and what type of gift is appropriate. Parents, grandparents, friends and neighbors alike can feel at a loss for gift giving.
“Some parents of graduates may consider giving a computer, cell phone or used car for transportation,” said Kathleen Riggs, Utah State University Extension professor in family and consumer sciences. “However, these can be very expensive and out of reach for many parents.”
Riggs suggested that taking the graduate out for a nice meal and then giving sound financial advice may be the most useful gift a parent can provide.
She suggested six financial management strategies to include as parents deliver their financial advice gift to their graduate.
• Set a budget and stick with it. Once the graduate moves away from home, it can become easy to spend too much on food, entertainment or dates.
• Concentrate on taking care of needs firsts; wants second. Most people put too much effort in accumulating things they feel are necessary to succeed. No one really needs designer jeans, and though it is convenient to own a laptop or iPad, libraries or classrooms usually have computers available at no charge.
• It is impossible to “keep up with the Joneses.” Advise the graduate to only keep up with themselves. This goes along with the advice of not tying self-esteem to having what others have.
• Understand the concept of delayed gratification. Teach that saving for a major purchase over time will bring great satisfaction because of the accomplishment and will help them learn to stay out of debt.
• Participate in any type of work-offered savings plan as soon as they enter the workforce. With retirement plans becoming a thing of the past, this is crucial.
• Be prepared to work hard at whatever they do, and develop a strong work ethic. It may take a while to work up to a job they love, but this bit of advice will take them far in life, even if they didn’t graduate at the top of their class.
Riggs said more suggestions and guidelines parents can use to prepare their son or daughter for being out on their own are at http://moneyning.com/advice/.
For friends and relatives of a graduate, Riggs had additional suggestions.
“Even if the graduates aren’t directly related, it’s nice to honor them in some small way so they feel a sense of appreciation for their hard-earned accomplishments,” she said. “With that said, you can compliment someone for an achievement without feeling obligated to send a gift for every announcement you receive or for every neighbor, co-worker or acquaintance who is excited about their son or daughter graduating.”
Books, jewelry and other trinkets are common gifts; however, money often talks, and by pooling financial gifts from family and friends, graduates can purchase something they may really need as they head off for college or that first job away from home, Riggs said. There are no general guidelines on amount, except for staying within the budget. Gift givers may want to give $100, but $10 may be more realistic.
“If you don’t like giving cash because you want more control over the type of item the graduate purchases, or you want to help him or her spend it wisely, gift cards are a good choice,” she said. “Choose a store that carries a variety of household or technology items that will come in handy for the graduate. Another option is a gift card to a local restaurant or a chain. If the graduate is moving, choose one that has a business in the city where he or she is moving.”
For those who can’t afford a gift or would prefer one that doesn’t have an actual price tag attached to it, Riggs said to consider offering service. Changing the oil in a vehicle, providing boxes or totes for personal belongings or offering to help move could be very beneficial to a graduate.