Posted: Alayna Okerlund|June 26th, 2019

Credit Repair

Unique Financial Gifts for College Graduates

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Written by Alayna Okerlund
Alayna Okerlund is a Content Management Specialist for Best Company. She is proud of her journalism background and strives to create informative, interesting online content. Professionally, she plans to further develop her writing skills and continue building up her SEO knowledge base. When she's not working, she enjoys being in nature and trying new foods.

With the end of the semester approaching, many students are preparing for graduation. Those on track to graduate this spring are most likely focusing on finishing end-of-semester projects, studying for finals, and purchasing their graduation cap and gown.

And many of these soon-to-be graduates are looking forward to graduation gifts.

What does this mean for you? If you are planning on celebrating with someone who is graduating this year, you are likely planning on giving them a gift of some sort to congratulate them.

There are many different types of gifts you can choose to give your favorite college graduate, but how many of those gifts will truly help them face post-graduation adulthood? If you want to select a gift that will benefit a new graduate for years to come, choose to give them a finance-related gift.

We asked a few reliable sources to see what types of financial gifts are best suited for college graduates. Here’s what they suggested:

Books

Patti Black, Certified Financial Planner at Bridgeworth LLC

“Timeless financial books like The Millionaire Next Door (the sooner you learn 'big hat, no cattle,' the better), Your Money or Your Life, or The Little Book of Common Sense Investing. If you learn these financial principles in your 20s, you will have a much higher likelihood of achieving financial independence.”

Book title: The Millionaire Next Door

Book title: Your Money or Your Life

Book title: The Little Book of Common Sense Investing


Chase Lawson, Author of Financial Freedom: Breaking the Chains to Independence and Creating Massive Wealth

Book title: Financial Freedom: Breaking the Chains to Independence and Creating Massive Wealth

Book description provided by author: It is a personal finance book geared towards those in that age group and is written by a 26-year-old who personally overcame over $23,000 in credit card debt to now being a homeowner in Austin, Texas. Unlike many other books on personal finance, the author really relates to his readers and provides helpful tips and strategies that are easy to understand and cover a wide range of topics that are important for those entering the real world. It includes topics such as when/how/why to invest, buying vs. renting a home, life insurance, taxes, budgeting and so much more!  It would definitely help a college graduate starting their career journey.


Jackie Ducci, Ducci & Associates 

“This book is perfect for college grads who are entering the workforce and are looking for the unfiltered truth on how hiring decisions are made.”

Book title: Almost Hired: What’s Really Standing between You and the Job You Want

Book description provided by author: When you apply for a job but fail to get an interview, call back, or offer, no one tells you why. The fact is, most job seekers are unwittingly making critical mistakes at every stage of the hiring process because the job-seeking advice they've always been told is just plain wrong. The unfiltered truth about how hiring decisions are really made is about to be exposed.

In Almost Hired, Jackie Ducci shares over a decade of real-world insight into recruiting and hiring. She shares insider knowledge of how to stand out at every stage of the process, from submitting your application through accepting an offer.

Whether you're a first-time applicant, considering a career change, re-entering the workforce, or just plain struggling to gain traction in your job search, this book will help you zoom past the competition to hear those magic words: You're hired!


Alice Stevens, Debt and Tax Content Manager at BestCompany.com

“I would recommend a book on negotiating like Never Split the Difference. Salary negotiation is especially important for women because they tend to negotiate less often than their male peers, which turns into losses over time. Negotiating a starting salary is especially important because it's the starting point that future raises will be based on.”

Book title: Never Split the Difference

Credit building assistance

Sean Messier, Credit Industry Analyst at Credit Card Insider

“There are plenty of financial gifts that can help ease a college grad’s transition into the real world. One option? Help the grad lay the building blocks for great credit.

If you’re looking to help a college grad ease into true adult life, make sure they’re aware of all the ways credit affects everyday life. Then, if they’ve already developed credit and solid debt repayment habits, consider offering to pay the annual fee for a higher-tier credit card.

A credit card with a higher annual fee generally comes with greater rewards and benefits than their low-fee or fee-free counterparts. For example, if the grad is an avid explorer, consider a travel credit card that offers miles per dollar spent and provides perks like rental car insurance or complimentary hotel upgrades. This can help grads bolster their credit scores while reaping rewards on purchases they’d already be making anyway.

There’s one catch here — you have to make sure you’re confident in the grad’s ability to knock out bills in full, so you’re not simply making it easier to get lost under a mountain of debt.”

Brokerage account

Matthew Ross, Co-owner and COO of The Slumber Yard

“I think opening and gifting a brokerage account to recent graduates is extremely useful for a variety of reasons. Not only does it give the graduate a head start in terms of savings, but it also provides a multitude of valuable financial lessons.

I know this from personal experience since this is exactly what my father did for me when I graduated from college. In short, he opened up an investment account with $5,000 and turned over the keys to me.

Managing an investment account at such a young age was very positive development for me. It got me in the mindset to start saving and adding to the account early.

Even at my first job out of college, I'd split each of my paychecks so I could consistently deposit more money into the account. It also got me interested in the financial markets. I started following the Dow and S&P and would buy stocks I felt were undervalued. I still to this day use the same account my father opened for me, except it's a lot bigger now.”

Additional classes

Kelsey Formost, Copywriting and Marketing Expert

“The best monetary gift I ever received was the gift of a specialized class for my chosen career niche that wasn't offered by my university.

I knew I wanted to be an entrepreneur and create my own path after graduating with honors from Davidson College. While my education was outstanding, there were a lot of things I still didn't know with regards to setting up my own business online.

I came across a few platforms that offered highly-specific classes in exactly the career I wanted to build for myself, namely Marie Forleo's B-School, Amy Porterfield's Marketing class, and a few other female-forward classes for entrepreneurs who wanted to start their own online businesses.

But those classes were expensive the lowest cost being a hundred dollars and the more expensive programs coming in at $2,000-$3,000. I certainly couldn't afford it as a recent grad and entrepreneur just starting out.

As a gift, my parents gave me a check that covered the expense of one of those classes. It was a huge relief to be able to afford that education I needed to jump start my career dreams. Taking those classes allowed me to start my online copywriting and marketing business that now supports me full time. I now spend my time helping other entrepreneurs grow their businesses through copywriting and online marketing.

Some other organizations that offer a wide variety of classes: Skillshare, Udemy, Brit & Co., and more.”

Financial planner/advisor session

Christine Centeno, Certified Financial Planner and Founder of Simplicity Wealth Management

“One hour with a financial planner allows student to ask any questions they have about finances and investing.

The agenda is open basically, what are your biggest financial questions?
The basic topics I usually cover include the following:

  • building credit
  • the importance of cash reserve
  • what to look for in employee benefits/how to enroll
  • importance of starting to save
  • what to invest your first 401k contributions in
  • Roth IRAs and what they are all about
  • what I wish I knew about finances when I was 22


Jacqueline Devereux, Financial Expert at SproutCents

“A great gift to give to a college graduate would be a session with a financial adviser. Make sure you are finding an adviser that is fee-based and not commission based as the financial goals and needs of a college grad are different from an established professional looking to invest. 

A financial adviser will help determine a plan for repaying student loans, which many new graduates find unaffordable. They will advise of refinancing opportunities or any special forgiveness plans due to the chosen career path. 

Your 20's are a crucial time in your financial life where you are making many decisions that will affect you for the rest of your life such as buying a home, getting married and investing in your retirement. Getting ahead of the curve and starting with excellent financial habits will set you up for success over the course of the next 30 to 40 years.

A financial adviser will also help you create a budget. Now that you are a young professional and earning a salary you need to know how to budget it. You are most likely paying rent now and with student loan repayments kicking in you need to create a manageable budget. 

A two-hour session with a financial planner costs between $150-$400. There are firms that specialize in working with Millennials and Gen Z-ers and you can meet with them in person or virtually.”

Investments

Dr. Roshawnna Novellus, CEO and Founder at EnrichHER

"The best gift you can give to a college graduate, especially an entrepreneur, is an investment. Investments can come in many shapes and sizes, but in particular, an investment that will help the grad launch their career is the most worthwhile.

This may mean opening stocks in their name, starting a retirement fund, or investing in their business. Getting capital funding for businesses is the main aspect that blocks many entrepreneurs from bringing their ideas to life. Without capital, it's impossible to manufacture a product, invest in technology, or hire employees all pieces of the puzzle that must be in place in order to own and operate a business.

By giving a recent college grad any financial investment, you are investing in their future, setting them off on the right foot that is necessary for success down the line."

Amy Eury, Marketing Strategist at MyBankTracker.com

“Gifting individual stock shares or cash for mutual funds or bonds will help them start to invest and build wealth. There are sites where you can choose individual shares (FrameAStock or GiveAShare) or Betterment lets you buy stocks and bonds and transfer them to your grad’s online account. For mutual funds, you’ll buy them up front and then transfer them.”

Life insurance

Sa El, Co-founder of Simply Insurance

“I think a great gift would be life insurance paid up for an entire year. It will help get them started on a strong financial journey.

I recommend life insurance paid up because it gives them a year to get things in order to be ready to pay for coverage themselves and it also helps them get something that far too many people procrastinate about.

The price is based on the individual; however, a term life insurance policy is usually super cheap.”

Mark Charnet, Founder and CEO of American Prosperity Group

“I have been a financial advisor for 37 years; the best answer I can suggest is to remind the graduate of their two greatest financial assets: youth and health both of which will be fleeting over time. Everyone gets older and probably not as healthy as when they graduated from college. There will be pressing financial needs along their financial life, such as a mortgage, children to raise, education to pay for, and ultimately, a retirement to fund. While planning for these events, there may be hurdles to overcome like sickness, disability, and even death.

Fortunately, there is a program that can tackle most of these scenarios at the same time. One that can provide for emergency funds during life’s journey, benefits in the case of a prolonged disability or a long-term care event, a terminal illness diagnosis, or even an untimely death. Better still, if none of these occur, the program will allow for a tax-free income stream during the graduate’s retirement years to supplement their IRA, 401k and Social Security.

This contract will benefit when the stock market rises and will not suffer a loss when it falls. The account value will grow tax-deferred and is accessible tax-free when called upon, whether for an emergency or to produce a retirement income in the future. Under current tax law, the value is exempt from the financial aid calculation when applying for college financial aid for children or one’s self, thereby maximizing grant and loan eligibility and non-creation of debt.

It’s an overfunded life insurance policy (OFLI) but a very specific variety called Fixed Indexed Universal Life. It is a versatile platform that can do so much and when designed properly, under safer interest assumptions, will over-deliver with a multitude of benefits to the policy owner.

I wish my dad had started an OFLI policy for me when I was younger for many of the reasons outlined here, but one more as well.  When I was age 30, I became a diabetic and was no longer offered a standard rating and totally uninsurable sometime after that, denying me 100 percent of the benefits discussed. Suffice it to say, as a father now myself, my four children will not suffer the same fate as they all have an OFLI plan that was started for them before they graduated college, a legacy and gift I am most proud to discuss.”

Money coaching sessions

Michelle Clark, Founder of Shake Your Money Tree

“I’ve had quite a few parents purchase money coaching sessions as a graduation gift to help get their new grads off on a good financial footing.

The "Master Your Money" coaching session ($277 for 90 minutes) I offer teaches them the basics of financial wellness such as reconciling their bank account/checkbook, paying bills on time with a bill payment calendar or automation, managing credit and debt (especially if student loans are in play), creating a spending plan based on their new or increased income, knowing the differences between types of loans and interest rates, and protecting themselves and their belongings through the right types of insurance.”

Emergency fund

Amy Eury, Marketing Strategist at MyBankTracker.com

“Every grad needs savings in case disaster strikes, but a recent study showed 45.9 percent of 18- to 24-year-olds have no emergency savings set aside. When on the hunt for their first job, having that cushion can keep them from ending up in debt if unexpected expenses arise. Steer your grad toward an online savings account; they tend to charge fewer fees and pay higher interest rates. If you're giving money to your child, think about setting up a joint account if you want to add money in the future.”

Student loan payments

Mark Kantrowitz, Publisher and VP of Research at Savingforcollege.com

“The best financial gift for college graduates is to help them pay down or pay off their student loans. College graduates worry more about their student loans than anything else. This gift can be in any amount the giver can afford and will be greatly appreciated by the college graduate. It saves them from having to sell a tangible gift on eBay to recover the money to pay down their debt.”

Scott Butler, Financial Planner at Klauenberg Retirement Solutions

“Paying off student loans before they become debt may be one of the most effective gifts for a graduate. We often suggest that our clients pay for a student’s last year of college. This strategy will lessen the graduate’s student loan burden, while not having a negative impact on their qualification for financial aid, assuming they will not be moving on to further schooling next year. Plus, tuition paid directly to the school does not count against your gift tax exclusion.”

CD ladder

Amy Eury, Marketing Strategist at MyBankTracker.com

“Grads want to save for things like their first new car. Setting them up with a CD ladder makes it easy for them to keep earning interest until they need to use the money since you agree to leave the money alone until it matures. The longer the terms, the more interest earned. After the maturity date, they cash it out with the earned interest. Since the grad isn’t a minor, you’ll need to name him or her as the co-owner.”

Roth IRA

Amy Eury, Marketing Strategist at MyBankTracker.com

“Help start a Roth IRA for his or her future nest egg. Since they’re funded with after-tax dollars, withdrawals are tax-free. Even if grads don’t max it out each year, you’re helping them get started which helps if their employer doesn’t offer a 401k. Single graduates who earn less than $31,500 for 2018 may be able to get a saver's credit on their taxes for some or all of their IRA contributions.”

The bottom line

In the end, it’s up to you to choose what type of gift you will give. If you do decide to give a finance-based gift, make sure it’s something you’re comfortable with and something that won’t compromise your own financial standing. Financial gifts can be a great way to show your favorite college graduate that you care about them long-term and that you want to help them start their financial journey on the right foot.

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Do you have a product or idea that would be a good fit for this gift guide? If so, feel free to reach out to [email protected]

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