When the country and the world fall on tough economics times, things seem scary and confusing. Rising prices can make it harder to get by, and economic uncertainty doesn’t help either. Will you be able to get a job after graduation? How will this impact your ability to pay for school? Should you find additional work to make ends meet? All these questions are valid, but it’s important to keep things in perspective and remember that recessions are temporary - and that there are steps you can take to weather the storm.
What is a recession?
Many of us have heard the word “recession” uttered by our parents and the president a number of times, but what does it actually mean? It depends who you ask, but a recession is often technically defined as two consecutive quarters of negative GDP (gross domestic product) growth. But more generally, a recession can be thought of as a widespread, meaningful, and lengthy downturn in economic activity. You can also think of a recession as when the economy stops growing and starts shrinking.
A recession is usually only declared after the economic downturn has persisted for a decent amount of time; additionally, recessions vary in size and impact. They can be short, long, create a detrimental impact, or vanish without leaving much of a trace. A recession typically ends when economic growth returns once again to previous levels.
How will a recession affect college students?
Unfortunately, college students often feel the effects of a recession more than others. It might become harder to pay for college, and it can certainly be more difficult to get a job upon graduation.
Your school might feel the effects of a recession as well. Student activities and course offerings may suffer cutbacks as programs fight over budget constraints. Funding opportunities for student loans, aid, and employment may also suffer as a result of a recession. A reduction in funding might cause college tuition to rise, though it’s not a guarantee that your school will pass its budget woes onto students.
Graduating students entering the workforce could be faced with more limited opportunities too. From lower starting salaries to a lack of open positions, graduating students are often hit hard by recessions.
Why it’s not all bad - yet
Recessions can be tough on college students and soon-to-be graduates, but there are other things to consider about the current economic environment. First off, while inflation is high and there’s certainly been turbulence in the economy, there isn’t widespread agreement yet that we’re actually in a recession. This is a stark contrast to 2008, where things were a whole lot worse for everyone - college students included. That isn’t to say that we won’t get there, but we’re not necessarily there yet - so don’t panic.
What you can do to prepare for a recession
There isn’t much you as an individual can do to prevent a recession. But that doesn’t mean you can’t prepare. There are plenty of steps you can take to make sure that the impact of an economic downturn doesn’t hit you as hard as it can.
1. Work on your resume
There are usually significantly fewer job opportunities out there during a recession, so you’ll want to make sure that you’re as competitive as you can be when searching for jobs. You might want to look into learning a new skill or two to help you stand out above the competition.
2. Build your credit score
Weathering a recession is all about being prepared. Even if you don’t have a use for a good credit score right now, there’s a good chance you will in the near future. With a Fizz card, you can build credit without worrying about overspending, fees, or interest. And with a good credit score, you’ll be able to save boatloads - from getting cheaper student loans to getting approved for apartments that are in short supply.
3. Reduce your expenses
Take a step back and start to assess where you can cut back. Maybe it's getting rid of a few monthly subscriptions or limiting eating out to once a week. The idea is to start preparing for a worst-case scenario. Overspending is a issue we all tend to grapple with at some point or another, so make sure that you're being cautious of how you spend.
4. Create an emergency fund
If you have the means, it’s a good idea to start setting aside some of your income for an emergency fund. This way, if you’re laid off from your job now or in the future, you’ll have some cushion to lean back on. Your emergency fund can also help with other emergency expenses that might crop up.
5. Avoid credit card debt
During a recession, money can get tight - and Gen Zers are racking up credit card debt at extraordinary rates. The last thing you want to be doing is spending your hard earned cash paying off credit card debt. Plus, recessions typically come with increases in interest rates, so you can end up paying crazy amounts just to keep your credit card company off your back. Instead, use a Fizz card. With Fizz, there are no interest rates because we keep you from going into debt.
How fizz can help
Along with a recession comes all sorts of uncertainty and anxiety about the future. But there are a number of ways in which you can prepare - from learning new skills so that you stand out in job interviews, to making sure that you don’t overspend and figuring out how to budget more effectively.
This is where Fizz comes in. Fizz links to your existing bank account, so that you don’t have to worry about overspending. There are no fees, and no interest rates either. And while most student credit card companies have a 30-day billing cycle that encourages you to go into debt, Fizz has a daily repayment cycle, keeping your accounts up to date and keeping you from spending what you don’t have.
With a Fizz card, you can be in control of your personal finances and stay prepared for whatever comes your way - including a recession. So don’t wait another minute. Download the Fizz app today!