Cash Is King When It Comes to Graduation Gifts

Cash Is King When It Comes to Graduation Gifts

College and high school graduates are most likely to receive cash as gifts.

Suzanne KreiterBoston Globe via Getty Images

This cap-and-gown season, Americans are expected to spend a total of $5.5 billion in presents for graduating high school and college students, according to the National Retail Federation. And while it might not be the most creative option, 53% of gift givers will be presenting graduates with cash.

In total, an estimated 34% of Americansplan on buying presents this yearaveraging $107.48 in expected spending.

We are seeing an increase in spending over last year by about $5 on average per gifter, NRF senior director of Industry and Consumer Insight Katherine Cullen tellsFortune.

The NRF has been tracking graduation gift spending with Prosper Insights & Analytics since 2009, when Americans spent a total of $3.9 billion. While last years amount dipped to $5.2 billion from 2017s record high of $5.6 billion, Cullen notes some of the deviation could be due to fluctuations in graduation rates, among other factors. Overall, she says, spending has been up, and the four years have been very strong.

Of the 7,591 U.S. adults (aged 18 and older) who participated in the 2019 survey, 53% plan to give cash, 41% a card, 33% a gift certificate, 15% apparel, 10% electronics, and 5% checked the other category.

Cash in a card is definitely the most popular gift for new grads, Cullen said. Its something they can use when going off to college or starting off their careers. But weve also seen spending growth in other categories like gift cards.

Although there hasnt been an increase in buying electronics for graduates, Cullen says the interest in giving tech gadgets has really expanded in recent years, whether its a Fitbit orAppleWatch or home voice device, there are a lot of options. (The NRF doesnt calculate how much is spent on each graduation present category, as they do withother holidays like Mothers Day.)

While people ages 45-54 this year will spend the most on average on graduates, or $121.38, only 32% of them plan on giving a present as opposed to 45% of people ages 18-24.

Those in the younger demographic may spend a little less on average [at $78.99], but theyre generally the most likely to give a gift to family or friends, Cullen says. Theyre more likely to give something like apparel, something maybe a little bit smaller.

Thats pretty generous considering these younger consumerscurrently face approximately $1 trillion in student debt, a figure that couldincrease depending on changes to the federal budget.

While you might consider perusingFortunesguide to creative presents to give a recent grad, theres probably a reason why an envelope of cash remains the most popular gift to start chipping away at those loans.

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