Without a doubt as it pertains to graduation gifts “cash is king,” but other financial gifts can have a much larger impact.  Whether high school or college, graduation launches students into all the financial responsibility of adulthood.  So what better time to help the graduate in your life get started on the road to successfully navigating their own finances.

Let’s explore which gifts would be the most helpful and yet practical that you may want to consider:

Help with bills

Most high school and college graduates have never had to live on a budget before so help with utility and cellphone bills, and maybe even a few months of car payments or even rent could be of great assistance.  An offer to pick up the tab for books for a semester or two would also go a long way.

Student loan payments

Who wouldn’t want help with student loan payments?  Most loans have a six-month grace period after graduation, but payments made during that period can cut interest accrued, resulting in lower monthly payments for the graduate.

Jump Start an Emergency Fund

Saving for a rainy day can be exceptionally difficult when just starting out, especially with all of the other expenses.  But without a cushion, the grad runs the risk of using credit cards in emergencies which can be costly and result in too much debt. A gift of helping to create an emergency in an online account savings account that pays above-average interest could be a great way to avoid the credit scenario.

Reduce Credit Card Debt

Too many grads end up leaving college with high-interest credit card debt, which could take years to pay.  An offer to tackle either the lowest balance or highest interest cards would be a huge weight lifted.

Life Insurance Policy

This will get an eye roll, but term life insurance for a healthy “20 something” is very economical.   A 30-year policy assures him of having coverage until he’s 50 or beyond.  Most policies are designed with a rider which in some cases could accelerate death benefits during a serious illness.  Also, many term policies can be converted to permanent with a cash accumulation feature, which can later be used to supplement retirement income.

Retirement contributions

For a graduate entering the workforce offering to fund a Roth IRA is an amazing gift. The contributions grow tax-free and can be withdrawn tax-free in retirement.  With beginning at such a young age, the money has decades to compound.  You might consider offering to match what the grad contributes up to a set amount over a certain period.

These are not typical graduation gifts but certainly would be appreciated!!