Between the economic pundits who rule the news and the fact that everything from cars to cereal boxes appears to be shrinking, this whole “recession” business feels done to death. But before you pop in those ear buds and zone out, check out how the current economy could already be affecting your choices, and learn what to do to stave off a financial meltdown of your own.
Only Leaves Grow on Trees
The reality is that your current tuition has to come from somewhere. If your parents are footing the bill for college, or if you’re in student loan heaven (aka denial), you may not yet feel the crunch. But even those who manage to squeak through undergrad job-free will face unprecedented job shortages upon graduation. Careers that were abundant five years ago have either dried up or are reserved for candidates with—you guessed it—work experience.
Additionally, houses aren’t the only type of investment taking a huge hit in today’s economy—so are college savings accounts, education endowments, and federal student loans. For many students whose eligibility has changed due to recession, part-time employment is a must.
All naysaying aside, there is plenty you can do now to avoid financial ruin later. Adopting even these minor changes can help prepare you for major economic curveballs down the road.
1. Start building credit—slowly! Don’t run out and rack up a sky’s-the-limit credit card (if those even still exist). Instead, consider purchasing only fuel on a low-interest gas station card, or take advantage of same-as-cash financing on necessary items like computers and appliances.
2. If possible, stay home. Sure, there are days when you feel like your folks are making you crazy, but you’ll thank yourself later for the money you saved by living at home as long as possible or opting for movie nights in the dorm instead of going out.
3. Incurring new debt = bad. If you don’t need it—like, really, really need it—don’t buy it. New cars are great, but five years of payments and higher insurance can be crushing in times of financial distress. The same goes for student aid—accept only what you need for tuition and fees.
4. Developing money-saving habits = good! It’s never too early to become fiscally responsible. Even seemingly small habits like using dish towels instead of paper can make a sizeable difference in your wallet. And there’s a whole world of used bookstores, thrift shops, and swap meets at your disposal—use them. Find more practical financial advice here.
5. Talk to people in the know. This doesn’t have to mean a visit to your financial aid office (although that’s not a bad idea once in a while). Parents, advisors, and instructors have access to more life experience and financial resources than you—they can offer great advice on managing your money now and saving for the future.