Entering a Recession

Posted by: Meredith K. | Apr 15,2008


I spent most of last year and the beginning of this year talking about student credit card use and how its getting out of hand – both the way credit card companies market on campus and the way students use those cards once they sign up.  If that wasn’t hard enough, the current crop of graduating students are entering the job market during a recession.  

What’s this mean?  It means that everything I’ve written thus far is even more important.  Students need to budget effectively, keep debt to a minimum, and save as much as possible.  It may even be necessary to get an advanced degree to compete in a difficult job market.  Of course, this could mean taking on new student loans, but sometimes you have to weigh these sorts of decisions.  

There’s really not much you can do beyond that.  The economy is not great right now, plain and simple.  Whatever money you do have may not go as far – as a recession can lead to increased interest rates on credit card bills and an inability to secure other types of loans.  The good news is that it is not a terrible job market right now, even with the economy hitting a lull.  The recession is due to decreased consumer spending and tanking investment – which is not necessarily a reflection of job stability.  

However, if you’re looking to get a job in the financial sector, it can indeed be more difficult.  Financial powerhouses are folding, leading to a lot of uncertainty.  This uncertainty could lead to employers not wanting to take a chance on an employee with a slim resume.  Obviously this isn’t a great time to be a mortgage broker either, as home sales are down.  So to suggest that the job market is all fun and games right now is far from accurate.  

Regardless of what industry you’re entering, you have to think very seriously about how you spend your money.  Money is going to be lost to debt and interest and you can’t necessarily count on a great starting salary.  This means savings are more important than ever.  It may even be necessary to take on a second job.  One thing the younger generation does is look towards the short term rather than the big picture.  Even if your able to afford your living expenses month to month, you should be thinking about how your savings will look at the end of the year – or five years, or ten years.  This means finding a way to generate extra income and not spending that income unwisely.  

Let the recession create good economic habits.  Really, keeping debt spending to a minimum and saving money should be something you were doing anyway.  Perhaps this generation will have better spending habits than the one that came before, as they’ll be forced into some fiscal responsibility by entering the workforce during a recession.    

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