Graduation ceremonies and celebrations are in full swing. Mulling over what to give your favorite grad? Millennials have some novel suggestions.
More Millennials than Gen Xers and Baby Boomers would give the gift of a financial account to a recent college grad. They’d tell the latest crop of alums to start a portfolio ASAP and to take advantage of their future employer’s 401k, too.
E*TRADE’s most recent StreetWise study gathered experienced investors’ opinions about the latest wave of college graduates. The results uncovered generational differences when it comes to gifts best suited for grads and tips for managing finances.
Perhaps wise beyond their years, 45 percent of Millennials say they would gift grads an IRA, brokerage account, money market account or something similar. Around 39 percent would offer to make a payment toward student loans or other bills.
Meanwhile, the older generations consider cash king when it comes to graduation gifts. Almost half (48 percent) of Gen Xers and three in five Boomers would give money.
When asked what advice they would offer the Class of 2018, Millennials (59 percent) would first recommend grads start investing—even if it’s a small amount. Another 58 percent of Millennial respondents say they would tell graduates to participate in their employer’s 401k plan.
“It’s understandable that retirement would not be top of mind for graduates during their college years,” Mike Loewengart, VP of Investment Strategy at E*TRADE Financial, said in a statement.
“But as they enter the workforce, now is a great time to take that all-important first step in retirement investing, and ignite the immense power of compound interest, which is in their favor considering their time horizon,” he explained. “Starting to sock away even a small percentage of their paycheck now can pay serious dividends down the road.”
To that, the older generations agree. Gen Xers (77 percent) and Baby Boomers (86 percent) advise graduates to contribute to a 401k above all else.
And the second most common helpful tidbit they suggest? Spend less than you make.
Jessa Claeys is a writer, editor and graphic designer.
