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NEW YORK (CNN/Money) - We're coming up on a major graduation weekend, and of course many families are wondering what to give their graduate. A copy of "Oh, the Places You'll Go" by Dr. Seuss is great, but it won't really prepare them for the real world. And the real world is coming.

High schoolers are preparing to pay tuition of more than $11,000 at public universities, and more than $26,000 at private universities, according to the College Board. And the average college grad owes nearly $20,000 in student loans, according to Sallie Mae.

While they're bright-eyed and bushy-tailed, take the opportunity to get them started on the right path for their financial lives. Here are today's five tips on smart gifts for your grad.

Cold hard cash is every graduate's dream, and really, it's not a bad idea. As I just mentioned, these grads are headed for -- or are already bogged down in-debt. There's nothing wrong with helping them pay for college or pay off their debt, just do it in a smart way, so they don't spend the money in one trip to the mall.

In many cases, you can make a check out to the school directly. "Parents of Boston College grads can drop off a check in person at the financial aid office even on graduation day," says Terry Lepore, a Student Services Associate at that university. That's if the student is taking on government loans, which BC administers. If the student's loans are through a lender, the check should be made out to the lender.

Whether it's to help foot some of the bill for the 2005-06 school year or to pay off some of the past four, you're lightening the graduate's burden.

Yes, the iPod is one of the hottest tech gadgets right now and if your graduate doesn't already have one, he probably wants one. Don't take the bait. It will probably encourage them to either spend a lot of dough downloading music on iTunes, or download it for free -- illegally -- and get kicked out of school. Trust me, there are smarter gadgets to buy.

How about a handheld organizer or wireless handheld? It can help the college-bound student stay on schedule with term papers, tests, and family birthdays. It can also help the recent college grad stay organized as a new professional.

Another great idea is a gift for the gadget they already have, their computer. Buy them some personal finance software such as Intuit's Quicken 2005 Deluxe, which sells on www.Quicken.com for only $39.95. Another option is Microsoft Money 2005 Deluxe for $59.95. Both will help the graduate keep track of their finances, stay on budget, and plan their financial future.

Your grad might have a car they want to take to campus or a car they want to drive away from campus. Either way, it's going to cost them a lot for insurance simply because they are young. Graduates who get their own policy pay more because they are the primary driver on a car.

Parents can give their grad the nice gift of cheaper auto insurance by keeping the graduate under their policy as a secondary driver. It can cut the grad's bill dramatically because they get the price break of the parent's age and get savings from the multiple-car discount. Check out all the details with your insurance company.

A little subtle advice is much appreciated. Get your graduate thinking more about finances by giving her resources. Try a subscription to a few personal finance magazines such as Money Magazine, Kiplinger, or Smart Money.

Also, check out the personal finance aisle at the bookstore for books that offer advice for the college-bound and twenty-something professional. They might not like your lectures, so instead give them something that makes them look savvy.

It's the hot topic for personal finance these days: retirement. And experts say there is no replacement for starting your savings early between the ages of 22 to 35.

It's all because of compounding. For example, a 25-year-old invests $2,000 a year for just eight years and never invests again after that. She will have earned more by the age of 65 than a 35-year-old who invests $2,000 a year for 32 years, even though the 35-year old invests four times as much.

Start a Roth IRA for your grad. Over time, it could compound into a big chunk of their retirement savings. Or have fun by giving a few shares of stock in a company they admire.

Gerri Willis is a personal finance editor for CNN Business News and the host for Open House. E-mail comments to 5tips@cnn.com.