I first would like to take this opportunity to congratulate all the high-school graduates and their families.  Graduating from high school is a milestone that deserves to be celebrated.   Although high-school graduations have been cancelled, thus depriving high-school graduates of their special day, it is important that we all take the time to congratulate these seniors on a job well-done.  They may not have a traditional commencement or prom, but that doesn’t diminish what they have accomplished.

My advice to high-school graduates is to continue their education beyond high school.  My fear is that high-school graduates who do not continue their education, unfortunately, are going to be locked in lower-paying jobs with fewer growth opportunities.  I am not saying college is for everyone, because it is not; however, there are many other ways for graduates to continue their education such as trade schools and apprenticeships.  It is important that high-school graduates understand that we live in an ever-changing world, and it is critical to constantly re-educate themselves.  If you do not have a commitment to some sort of continuing education, you’re going to find that you’re falling behind, and once you fall behind, it is very difficult to catch up.  I encourage all high-school graduates not to look at graduation as an end to their education, but rather, a new beginning.

Because ongoing education is important, and unfortunately it is not free, you and I who give high-school graduation gifts should take that into consideration.  For those of you who are looking for a gift for a high-school graduate, as opposed to giving cash or a gift card, why not give something that will have longer term value.  My recommendation is to consider setting up an education savings plan for the graduate.  I recognize that most of our high-school graduation gifts are not going to pay for someone’s college education or even education at a trade school.  However, gifts add up and before you know it, if more family and friends banded together with their gifts, they can make a dent in the cost of the future graduate’s education.

I recommend families set up a Michigan Education Savings Plan (MESP) (www.misaves.com) and encourage family and friends to make gifts to that account in honor of their graduate.  The Michigan Education Savings Plan is a 529 Plan. Money invested does not just have to be used for college, but rather, for post high-school education.  The MESP, if you buy it directly through the state’s website, is a very good low-cost plan.  Other 529 Plans that are also investor friendly are Vanguard and Fidelity.

I recognize that contributing to a 529 Plan is not what the graduate would want.  After all, I have no doubt that they would prefer a gift card; however, that should not be the criteria.  High-school graduates are entering into a very competitive and challenging world where education is not only essential, it is also extremely expensive.  If your high-school graduation gift can help reduce the burden on the graduate, your gift will pay dividends well into the future.

To all high school graduates and their families, I congratulate you on a job well done; however, remember your educational journey is not over; it is just beginning.

Good luck!

Rick is a fee-only financial advisor.  If you would like Rick to respond to your questions, please email Rick at rick@bloomassetmanagement.com.