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.
Rick is a fee-only financial advisor. If you would like Rick to respond to your questions, please email Rick at firstname.lastname@example.org.