With graduation season rapidly approaching, you may be struggling to find the perfect gift for
that special college grad on your list: child or grandchild, nephew or niece, or just a very special
family friend. Why not consider a gift that will keep on generating benefits for years:
introducing your college grad to the world of investing?
Studies indicate that only about 18 percent of adults between the ages of 18 and 25 own any
investments at all, according to Bankrate.com. Many young people feel intimidated by the idea
of entering the financial markets, and others simply think it’s better to wait until they have a
significant amount of funds to invest. Of course, that can also mean that they miss out on one
of the biggest financial advantages they have: the value of time and compounding. The sooner
they can get started, the better.
Here are some ideas to help you encourage your new college grad to begin learning how to put
their money to work for them sooner, rather than later. You can help them realize that investing doesn’t have to be scary, and it doesn’t even have to wait until they’ve got a big bank balance.
- Make a matching gift. This is the trick that philanthropy organizations learned long ago. Set up an arrangement with your grad so that you match any deposits they make into a savings or investment account. As of 2026, individuals can give up to $19,000 to another person annually without incurring the gift tax, and couples can gift up $38,000. Leveraging your gifts with the graduate’s own contributions helps them develop the saving habit and also gives them a great incentive to make regular deposits.
- Help them invest in what they’re already passionate about. Many young people are very conscious of social justice, sustainability, and other important causes and could be ideal candidates for socially responsible investing (SRI). Many mutual funds and exchange-traded funds (ETFs) have been established precisely for this purpose. You could even use such a vehicle as a basis for a matched-gift program, as described above.
- Open an IRA for them. Even if their first job out of college isn’t with a company that offers a 401K or other tax-advantaged workplace plan, you can introduce them to the benefits of tax-advantaged savings. A regular or Roth IRA is available to anyone with income equal to or greater than the amount contributed to the plan. Roth IRAs often appeal to younger investors because of their flexibility and also because they allow tax-free withdrawals in retirement, when most investors will be in a higher tax bracket. But encourage your young saver to leave the funds alone and allow them to grow tax-free for as long as possible.
- Help them automate their investments. Gone are the days when you needed thousands of dollars to open an investment account. Now, with programs like Acorns.com, StashInvest.com, and others, it’s possible to start investing with as little as $5.00. Even better, many financial advisory firms are beginning to offer greatly reduced minimums for opening accounts that utilize robo-advisors and other automated allocation tools. These kids are digital natives, and the idea of using online and high-tech methods for investing is often comfortable and familiar for them.
However you decide to go about it, helping that fresh grad become comfortable with and committed to disciplined investing is one of the most long-lasting gifts you can possibly give. You’ll be providing them with something that will pay dividends—literally—for the rest of their lives.
Stay Diversified, Stay Your Course!
