Here’s What It’s Like to Live in New Jersey as a Family of 4 on $150,000
A $150,000 income might seem like a lot. But read on to see why in some parts of the country, it's not a ton of money at all.
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I recently read an article that outlined the “ideal” graduation gift. According to this piece, financial planners say the gift should be equal to approximately one month’s rent or mortgage payment, somewhere around $1,000. The article said parents should give their children between $1,000 and $5,000 when they graduate from college.
If you’re wealthy and can afford to write out $1,000 checks to the important graduates in your life, this article may not be for you. The rest of us need a better plan. If you’re watching your bank account closely (and who’s not these days?), these three points may help you spend less while still celebrating the graduate.
1. Decide on a budget and stick to it
As someone who’s been down this road before, I want you to know you’re not alone. Springtime may usher in flowers but can also usher in stress for the parents of soon-to-be graduates. If you’ve been inundated with invitations to graduation parties and open houses, you may be overwhelmed with how you’re going to attend them all and how you’re going to cover the cost of graduation gifts.
No one expects you to refinance your mortgage to pay for gifts. It’s a ridiculous notion. The first thing you should do is decide on a total budget. This amount includes how much you plan on giving to each graduate. And if your child is in the graduating class, this total should also include how much you plan to spend on a graduation get-together.
Let’s say you take a look at your monthly budget and decide you can afford to spend $1,500 in total. That’s your graduation gift budget. Do not allow yourself to feel pressured into spending more. If other people want to put large charges on their credit cards to impress other people, let them. You’re only responsible for your household.
2. Make a list
It may sound cold, but you know some graduates better than others. For example, give your child’s best friend a slightly more significant gift than the kid who played soccer with them in 7th grade and hasn’t played a large role in their life since then. Your niece or nephew may score a more significant gift than the child of an acquaintance.
Create three tiers
- Acquaintances
- Friends
- Close friends and family
Now it’s time to begin jotting down names. Without giving it too much thought, assign each name to one of these three tiers.
Once everyone is in a tier, decide how much of your budget you will dedicate to each. For example, if your budget is $1,500, you may break it down to something like this:
- Acquaintances: $300
- Friends: $400
- Close friends and family: $800
You’ll spend a few minutes questioning your decisions if you’re anything like me. Naturally, you want to be generous with everyone, but that’s not the point. Unless it’s your child, you’re not responsible for making sure they have a deposit on their first apartment or can pay for their first semester of college. A graduation gift is meant to be a token — a tangible way to say congratulations.
Break each tier down by recipient
First, count the number of people in the “acquaintance” tier. For example, if it’s six, you’ll divide $300 by six and end up with gifts of $50 each. Do the same for the “friends” tier. When it comes to the “close friends and family” tier, it may not be so even-steven. Let’s say you have four graduates in this category. It’s okay to divvy the money up in a way that indicates your closeness.
Bottom line: Graduation gifts are an extra expense, and you owe it to yourself and your household to share in a way that won’t deplete your checking account.
3. A great gift doesn’t have to be cash
Would a graduate be thrilled to receive thousands of dollars in cash gifts? Of course, they would. Who wouldn’t? However, some of the greatest gifts most of us have ever received have felt more personal than a paper check.
When you give the gift of cash, the graduate knows precisely how much you spent. When you give an actual gift instead, they may have a rough idea, but you can secretly control the budget. Here are two ideas that may spark inspiration.
Memory album
I can’t tell you the number of times I’ve logged onto someone’s social media account to download personal photos (it’s not nearly as creepy as it sounds!). The trick is to look for images that represent the graduate well. It may be shots of them playing a sport, in a school play, participating in debate club, or hanging out with friends. You’re looking for pictures that will one day bring back memories.
Once I’ve downloaded the pictures I want to my desktop, I order prints from a nearby drugstore. Our local drugstore almost always offers 50% off on prints. You’ll probably spend no more than $15 on pictures.
Michael’s and Amazon each offer a fair number of attractive photo albums for around $15. Buying one of those and filling it with pictures of the graduate can cost you less than $30.
Espresso machine
Whether they’re graduating from high school or college, any coffee lover would appreciate a new espresso machine. And it’s easy to find them on sale. For example, Walmart is offering the Sboly Steam Espresso Machine with Milk Frother for just under $50. That’s half-price.
If you feel pressured to give more than you can afford, take a beat. Remember your financial goals and the budget you’ve set. There will be plenty of things you can spend that money on this summer.
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$300-800 for grad gifts ? Are you out of your gourd ?
Give them a $50 gift card to Walmart or a pen and pencil set.