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Grads Prefer Cash or Gift Cards + 10 Free Tips

Grads Prefer Cash

Grads prefer cash or gift cards as a token of appreciation for their accomplishment this year. For thirteen consecutive years their preferences have remained unchanged. This year the average person buying graduation gifts will spend $102.51, on par with last year’s $104.92.

The National Retail Federation and Prosper Insights & Analytics reports its recent survey found 55% will give cash, with gift cards at 32%, clothing at 14% and electronic gizmos at 10%.

The survey also found 45% of those ages 18-24 plan to give a gift to graduates, spending an average of $73.87, with greeting cards and cash being their gifts of choice. However, the biggest spending, at $119.86, comes from those ages 45-54 who may have a child at home. Those in the grandparent bracket of 65 and above give an average of $107.13.

The NRF projects total graduation-related spending will reach $5.2 billion, following the record $5.6 billion set last year.

As grads embark on entering college or the job market, there are ten great financial reminders to get your ducks in order ahead of time.

1. Get a Job Quickly

Good news for today’s grads: The unemployment rate for people ages 16 and up remains at the lowest in more than 18 years, according to the Bureau of Labor Statistics. Even if the first job is not exactly what they were seeking, graduates are likely to find some employment. They can gain experience and a paycheck while continuing to seek out their dream jobs.

2. Create a budget

A budget is a spending plan, based on income, lifestyle and goals. Grads should begin by tallying all set monthly expenses – including housing, utilities, student loans, car payments and any credit card debt – and variable expenses, such as groceries, gas and clothing. The total will help set a target for monthly income and savings.

3. Use Credit Cards Wisely

Younger millennials (age 18-24) have fewer credit cards, and use them less than any other generation. In fact, just 67% of young millennials use credit cards at all. However, most adults need one credit card for personal business and to help build a credit history. Grads who have any credit card debt should aim to pay it off before student loan payments begin.

4. Take Charge of Student Loans

Most student loans have a six-month grace period after graduation before regular payments begin. Graduates can check into loan repayment options, such as profession-based programs. Teachers or public servants may qualify for loan forgiveness. Some people qualify for income-based repayment plans. Those who suspect they might have trouble making payments should ask their lender about alternative arrangements.

5. Pay on Time

On-time payments are the single most important way build and protect a credit rating. They account for more than one-third of a person’s credit score.

6. Build an Emergency Fund

Deposit graduation money in a savings account dedicated to an emergency fund. Then, contribute 10% – or as much as possible – to the account from each paycheck. Build this fund to cover six to nine months of basic living expenses, although most new grads will find that even a few hundred dollars saved will go a long way toward covering an unexpected job loss, sudden car repair or a rental deposit.

7. Save for Retirement

Everyone should enroll in an employer’s retirement plan or open an individual retirement account (IRA). Saving $100 per month, growing at an annual rate of 6.5%, would amount to more than $320,000 over 45 years. Anytime income increases, raise the savings amount.

8. Get Health Coverage

The Affordable Care Act remains in place, which means that health insurance policies are available to policyholders’ adult children until they turn 26. This provision can make it more affordable for young adults who do not have insurance offered through their employers to maintain health insurance.

9. Consider Life Insurance

While you may feel immortal right now, things can change. Getting a life insurance policy while you are in great health is a smart move as you will get the lowest rates. If you develop a medical condition early you may be required to pay a much higher premium for coverage later. In some cases you could become uninsurable. New grads should consider insurance policies enabling you to raise your coverage level without further exams. Additionally, many life insurance policies combine life insurance with a savings program, allowing your policy to accrue a cash value you could borrow against, while living, if an emergency arises.

10. Consider an Investment Account

You can open an investment account with a major firm for $100 or less. While you may not have any real money yet to invest, you can get your feet wet. You could purchase a few shares in something you personally like and feel might prosper. On top of all of this getting a statement from your brokerage firm while a new grad will also add a few points to your self esteem, showing you have arrived in the real world.