High school graduate is making a smart financial move.

My first cousin's son is graduating from high school in a few weeks. An Illinois resident, he's heading off to the University of Illinois, a choice he made over all the other schools he was accepted to, his mother told me.

I asked her why he chose U of I over the University of Michigan, Indiana, and a few other top Big 10 schools. She told me it came down to money.

Let me back up a bit. My cousin's son starred in a few television commercials and print campaigns when he was a kid. With bright red hair, blue eyes and freckles, he was a casting director's dream.

His parents never touched the cash, and its been growing nicely all these years – enough to pay for college anywhere he wanted to go.

But it's HIS money. And when he looked at the cost of instate tuition at U of I versus paying twice that anywhere else, he made the smart choice.

If there's any money left, he's decided to use it to fund graduate school and buy his first piece of real estate.

Give the Gift of Financial Knowledge to your Graduate This Year

Some kids think that the day they graduate from high school or college is the day they stop learning.

The rest of us know that the real learning is just about to begin.

So what's an appropriate gift for your high school or college graduate? I believe that giving the gift of financial knowledge – something that isn't widely taught in high school or college – is the best gift of all.

If you're looking for a great gift that won't break the bank, try a subscription to a money magazine, such as Kiplinger's, Money, or Smart Money.

Learning the jargon is one of the hardest parts about learning to handle your money and these magazines do a great job of breaking it down to a manageable bite.

If your college graduate is leaving school with a mound of debt, Suze Orman's THE MONEY BOOK FOR THE YOUNG, FABULOUS AND BROKE can help give him or her a way to start paying off that debt and setting aside cash for retirement.

Give Your Graduate the Gift of a Roth IRA

May is the month for hats and tassles, and parents, grandparents, aunts and uncles all over are struggling to figure out what is the right gift for their college graduate.

While cash is always welcome – particularly for those kids moving into the real world with a house-size debt to pay off – there are other kinds of gifts that will keep on giving down the road.

Yesterday, I suggested giving gift subscriptions to financial information magazines, like Money, Smart Money and Kiplinger's. You might also browse the bookstore shelves looking for a good book.

But if you've got a little extra cash for your graduate, and he or she is heading off to a first job, consider helping out by opening up and funding a Roth IRA.

Once your graduate starts earning an income, you can contribute up to $4,000 of earned income to his or her Roth IRA. The cash will grow tax-free forever, and in 50 years, assuming an 8 percent rate of return, your $4,000 gift will be worth nearly $190,000.

A new kind of Home Equity Loan – home equity sharing without the loan

A small San Francisco investment company, backed by a subsidiary of the big insurance company AIG, is rolling out new form of home equity loan.

The company, Rex & Company, offers homeowners cash now in exchange for part of the proceeds of the property when the home is sold, according to the Wall Street Journal.

This equity sharing arrangement sounds a little like the original reverse mortgage products or some of the community development block grant-funded loans where first-time buyers offer to give back a part of the profits in exchange for a low-interest rate loan.

If you signed up for a home equity loan like this, you'd agree to pay half of any increase in the home's value. So if your home appreciates by $100,000, you'd owe $50,000 to the loan company.

Is it a good deal for you?

That would depend on how much of the future you're willing to bet. In the meantime, these loans are only available in 9 states, although you may see them offered nationally in a few years.

Bank of America's New NO FEE MORTGAGE PLUS Program

No one likes closing costs. The idea of paying an extra 3 to 5 percent of the loan amount in closing costs is enough to keep a borrower shopping around.

But getting a no-cost loan that raises the interest rate you pay over the life of the loan isn't much better.

Recently, Bank of America introduced a new loan program called the NO FEE MORTGAGE PLUS loan. According to the company, you won't pay any of the traditional closing costs including title charges, application fees, or mortgage escrow fees. And you won't pay a higher interest rate.

In addition, there's no private mortgage insurance to pay, even if you don't have 20 percent to put down. Bank of America says home buyers will save $3,000 on a $200,000 loan, or more.

The loans are only available to home buyers, although a no-cost refi version is expected to be introduced later this year. And, Bank of America promises to close in 25 days or less. If you find a better deal, you'll pocket $250 for your trouble.