What do parents and grandparents give as a gift to the college graduate of 2020, who faces a cratering job market and shoulders an average of $29,900 in student loan debt? The short answer is financial help, but that doesn’t mean showering the new graduate in your life with lots of money, especially if you’re crunched for cash yourself.

The best financial gifts are those that improve financial behavior, says Len Hayduchok, president of Dedicated Financial Services in Hamilton, N.J. “Leverage those gifts to teach good financial habits.”

This generation will certainly need them. Their older siblings who graduated at the height of the Great Recession spent the next decade struggling to make up for lost wages early in their career. Their struggle was so pronounced that a 2018 report from the Federal Reserve Bank of St. Louis determined that those born in the 1980s were at greatest risk of “becoming a ‘lost generation’ for wealth accumulation.”

Today’s graduates aren’t destined to share the same fate, especially if parents and grandparents can help them ramp up their money skills and encourage them to save. That’s what the financial graduation gifts that follow aim to do. They range from thousands of dollars to one that is free, though it does involve the added gift of your time. Besides what you can afford, the new grad’s employment status also will determine which of these gifts you can give.

Help With Debt.

Hayduchok suggests a similar pact for paying down debt. Offer to pay a couple of months of their loan payment, he says, if they put the same amount toward paying off a credit card. Along with monthly student loan payments averaging between $200 and $300, the average credit card debt for graduating students is $1,183, a 2019 Sallie Mae survey found.

Financial Planning.

It seems counterintuitive to give the new graduate, who may have no monetary assets to speak of, a few hours with a financial adviser, but that time with a professional can help these young adults start things off on the right foot, says Diane Pearson, a financial adviser with Pearson Financial Planning in Pittsburgh. Pearson has helped new grads evaluate job offers, understand the kinds of insurance they need and determine where they can afford to live.

If they’re considering moving to another city, “we look at the cost of rent and whether they will need to buy a car.” The emphasis, she says, is on financial planning. “If you’ve got a strong foundation, the assets are going to come.”

A Budgeting App.

Nothing helps a young person build a better financial foundation than learning to live within their means. If your finances are also tight, this next gift will be as much of a boon to you as it is to the recipient. Mint is a free budget app that helps users create budgets and track spending, bills and account balances to stay on target. The real gift, however, is spending some time teaching the new grad to use the app, or if it’s new to you, then learn together, says Achtermann.

ARTICLE_Gifts for Grads_Kiplinger_May 2020