Top money gift ideas for new college graduates suggested by financial pros

It’s graduation season and college graduates are embarking on a new chapter. If you want to give a present to your college grad experts recommend these money gift ideas. 

The Gift of Stock

Unless your graduate earned a degree in finance, chances are they won’t know much about investing in the stock market, says Scott Pedvis, senior private client financial advisor with Wells Fargo Advisors.

“As a graduation gift, buy a few hundred dollars’ worth of stock in their name – and use the opportunity to bond over the learning experience together.”

Fractional Shares

Pedvis advises not to assume that a big-name, pricey stock is outside your budget. 

“Fractional shares allow investors to buy stock based on a dollar amount they select as opposed to the price of a whole share,” he says. “Even with limited capital, you can help your graduate begin to build a diversified portfolio by purchasing fractional shares of stock.”

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Invest in an IRA

Often money is tight after graduation, making it difficult to save – even with a job, he says.

“By gifting a few hundred dollars to contribute and invest in an IRA for your graduate, you’ll be setting him/her up to grow the tax-deferred money,” Pedvis tells FOX Business. 

Giving Back

Consider allowing the college graduate to pick a charity, and then explain why it’s important to them.

“I believe that it’s never too early to learn the value of giving back. Then, make a charitable donation in their name – say $100-$200,” says Pedvis. 

Bon Voyage

If your graduate plans to spend time in a foreign country before starting their job, Pedvis suggests that you exchange your gift dollars for whatever currency is used at their destination.

“This thoughtful gift allows them to use the money however they’d like, and you save them the effort of the exchange,” he says.

Cash or gift cards

Kimberly Palmer, a personal finance expert at NerdWallet, says the best gift for a new college grad is cash because they have a lot of start-up costs for their new life.

“If you want to give a more tailored gift, you can pick out a gift card to a retailer where they can purchase items related to their new life, such as a department store or online retailer like Amazon,” Palmer says. “The amount is up to you and what you can afford – any amount can go a long way.”

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Fund an account

Putting money into an emergency fund, retirement account or down-payment account for a house can also go a long way toward helping a new grad find their financial footing, says Palmer.

“Any amount would be appreciated, and you can even give in coordination with other family members to make a larger contribution,” she says.

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Why money gifts make sense

These “money gifts” teach your graduate that you can never start saving and investing too early and the key is discipline, says Pedvis.

“The longer your money stays invested, the better your chances are of growing your nest egg,” he adds. “It doesn’t matter if you add to your savings monthly, quarterly or annually, but commit to continue to add consistently.”