On average, Americans spend a collective $4.8 billion in graduation gifts a year. That’s a scary figure for estimating a gift to your niece or grandson who is about to graduate. It’s tradition to send your graduating loved one a check — a tiny yet thoughtful gesture to offset the major loans they’re about to pay off. But how much is too much and what amount comes off as ‘cheap’? Here are some tips on how to figure out how much to give as a graduation gift.
Relationship to graduate. According to a survey from Spectrem Group, most gift givers feel comfortable cutting a check between $50 and $100 for high school and college graduates. Out of the 1,200 people surveyed, 87 percent said that cash for a graduation gift is only appropriate for immediate family members. Forty-nine percent responded that close friends should be encouraged to give gifts, and six percent said that graduation gifts are unnecessary.
Doling out checks to everyone you know receiving a diploma this year is a surefire way to drain your bank account. If you have several close friends and family members who are graduating this year; consider who would appreciate your cash gift the most. Come up with a budget and divide the sum accordingly.
Level of degree. Typically, a cash gift for graduating college is larger than what someone might receiving for graduating high school. For many, successfully completing a college degree merits a greater cause for celebration. If your graduating friend or family member is the valedictorian, graduated summa cum laude, or is receiving a scholarship or grant, then maybe your gift should honor that accomplishment. For a loved one who is receiving a PhD, a hefty cash gift is especially appreciated as they’re most likely going to be moving or starting a (most likely) low-paying fellowship.
Consider the graduate’s financial situation. Many college graduates leave school with many thousands — if not hundreds of thousands of dollars in debt. In fact, according to The Institute of College Access and Success, the average American leaves university with $30,000 in debt. Taking that into account — graduation might be an exciting milestone for many, but it can also be a financially stressful moment. When thinking of how much cash to give as a graduation gift, consider your loved one’s finances, and whether or not your cash gift will provide some relief.
Bottom line. No matter how close you two are, it’s always tricky to determine how much you should be giving a graduate. According to the National Retail Federation, as of 2012, people write checks for about $99.94 for their graduating friends and family. The ultimate gift-giving experts, Hallmark, did a study that determined the appropriate amounts of money to give a beloved graduate:
$25 is an acceptable amount for a close friend or a child of a good friend.
$50 or more is suitable for a close relative.
$20 is the average amount expected to be given for an acquaintance or someone you have a superficial relationship with.
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