federal student loans now top $1 trillion, according to a report by the Consumer Financial Protection Bureau last year. Even those without student loans may struggle to live on an entry-level salary or learn the ins and outs of budgeting and credit cards.With graduation season upon us, countless high school and college grads are starting a new chapter of their lives. Some face massive student debt. In fact,
To help these new grads, eHow talked to several experts on graduation gifts that can help steer them in the right direction, now and in the future.
Sessions with a Financial Advisor
When Beverly Harzog‘s daughter graduated, the credit card expert and author of the new book “Confessions of a Credit Junkie: Everything You Need to Know to Avoid the Mistakes I Made” paid for her daughter to sit down with the family’s financial advisor. “He just explained some basics about finance and investing, compound interest,” Harzog says. “Even paying for an hour or two of a financial advisor’s time can give them a nice grounding in personal finance. As they get out there and start making money, knowing a little something about investing can’t hurt. My daughter really appreciated that.” If you need help finding a fee-only financial planner, check out the Garrett Planning Network and search by state or zip code.
Personal Finance Books
Help the new grad learn to manage money by giving him or her a book on the topic. Michelle Dosher, manager at the Credit Union National Association, recommends “Money Rules: The Simple Path to Lifelong Security” by Jean Chatsky. “It’s an easy read, broken up in to several different sections into making money, saving money, spending wisely, investing and do’s and don’ts,” she says. David Bakke, an editor at the personal finance blog MoneyCrashers.com, suggests “Get a Financial Life: Personal Finance In Your Twenties and Thirties” by Beth Kobliner.
Tablet or Smartphone
Gadgets like tablets and smartphones are popular gifts, but you can add a financially savvy twist with personal finance apps, many of which are free or inexpensive. “If you’re going to give the grad electronics such as an iPad or Kindle Fire, give that person suggestions of financial apps that would help the grad,” Dosher says. “The person could download their credit union’s mobile banking app or the app for other organizations that they use.”
For the new grad who needs money to set up an apartment or build a professional wardrobe, Harzog suggests giving cash creatively with a “money tree” with bills attached to the branches. “It’s a huge change and they’ve got to have the clothes and the shoes to step it up and look professional,” she says. You might also encourage the recipient to put the money into a Roth IRA for retirement. “Roth IRAs can be really beneficial, especially when people start them at a young age,” Dosher says.
A Place to Crash
Parents of new grads might consider letting kids move back in, at least temporarily. “Offering rent-free living to a recent college graduate can help reduce the stress involved with managing finances on their own for the first time,” Bakke says. “[They] can use this time to help them get started on reducing and eliminating student loan and credit card debt, creating an emergency fund, and investing for retirement.”
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