Americans are in the graduation gift giving spirit, as the average person buying gifts will spend $106.45, up 3.9% from last year for a total of $5.4 billion, according to the National Retail Federation's 2016 Graduation Spending Survey conducted by Prosper Insights and Analytics.

This year's total shows an all time high in the survey's ten-year history, with cash being the most popular gift. "It's very encouraging to see consumers show interest in spending on gifts and graduation-related merchandise - a good sign for consumer sentiment as we head into peak seasons such as back-to-school and the holidays," says Ana Serafin Smith, senior director of media relations for the National Retail Federation.

Individuals aged 45 to 54 spend the most, at $120.74 on average, followed by gift givers age 65 or older giving an average of $105.52, and recent grads aged 18 to 24 giving $78.08, according to the NRF report. The study found recent grads, were most enthusiastic about recognizing and congratulating peers with 42% reporting they would be most likely to give a gift to their peers or family members.

For Susan LaVrar, mother of a 2016 high school graduate, graduation means it's time to celebrate and honor the student's accomplishments. "This time of year is so wonderful and really an occasion to look back and reflect on where the student started and how far he or she has come," she says. "I always want to make sure I send a heartfelt card and message along with money or a gift card."

Although LaVrar relishes sending a congratulatory gift and note, she admittedly felt awkward when it came to sending announcements about her son's graduation this year.

"I didn't want anyone to feel obligated to send my son a gift or money, because the announcement was merely to let people know he graduated from high school," she explains. "In fact I hesitated sending the announcement to some of his previous teachers, who had followed his academic progress through the years, because I didn't want them to feel compelled to send a gift."

LaVrar says her son received a bevy of positive notes and letters, along with some cash and gift cards. "One of his teachers sent him the most sincere, sweet note," she says. "Her letter meant so much to my son."

Thus far, LaVrar reports receiving only one high school graduation announcement from a close friend and has promptly sent her friend's son a cash gift.

It's Not All About the Benjamins

Many gift givers feel like LaVrar when it comes to graduation gifts--you receive an announcement and the only proper response is to address that announcement with a gift or cash.

"Graduation is a very positive time in a person's life and should be met with the same level of sincerity in which the announcement was sent," remarks Daniel Post Senning, spokesperson for the Emily Post Institute and the great-great grandson of renowned etiquette expert Emily Post.

"When people send a graduation announcement, it is a positive declaration of an accomplishment in that person's life," he says. "The announcement is not a prompt to send a gift or money, but more of a time to recognize what the student has achieved."

That means you don't have to whip out the checkbook automatically or find a trinket to meet the delivery of a graduation announcement. "A sincere, hand-written note to the graduate is very appropriate and meaningful," Senning says. "A heart-felt card and warm wishes are a wonderful way to congratulate the graduate in a genuine way and demonstrate that you too are celebrating the student."

With regard to gift giving, consider your relationship with the graduate Senning says. "If this is someone you mentored, a family member or a close friend, then a gift is appropriate," he says. "Not every relationship and every graduation is the same. But at the minimum, a hand-written note or card is a wonderful and very fitting way to respond to a graduation announcement."

Graduates should also bear in mind if a graduation announcement is sent, and a gift is received, be prepared to return the kind gesture with a gracious thank you card.

"Your response should match the manner in which the gift was delivered," Senning says. "A text message 'thank you' does not cut it so be prepared to mail or send hand written thank you notes. Also, a personal phone call or an in-person thank you also works as well. But be sure you thank the person with the same level of sincerity."

What happens if you receive a gift that missed the mark? Senning refers to the term "it's the thought that counts" in this situation. "If you receive a graduation gift that may be a little off, you should still respond in the spirit in which it was given," he advises. "Keep in mind that the person chose the gift especially for you, so keep your message positive and thankful."

When it comes to finding the perfect gift, cash still always tops most grad's lists. "Our graduation survey told us that many people who are planning to give gifts are looking to give gift cards, cards, cash, apparel and technology," Smith says. "Some gift examples that recent grads can give within these categories and not break the bank are: alumni gear, low value gift cards, accessories for cellphones or tablets or even laptops."