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Personal finance

College students and recessions

College students and recessions

College students and recessions

While we might not technically be in a recession, students are still feeling the effects of inflation and a turbulent economy. Here’s what you should know.

While we might not technically be in a recession, students are still feeling the effects of inflation and a turbulent economy. Here’s what you should know.

While we might not technically be in a recession, students are still feeling the effects of inflation and a turbulent economy. Here’s what you should know.

Jun 1, 2022

Sam Lipscomb

3

min

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!

Sam Lipscomb

Author bio

Sam is a Kenyon College alum and is head of content at Fizz. He's been a go to personal finance resource among his peers since getting his first credit card during his sophomore year of college. He hails from Washington, DC, loves all things aviation, and currently lives in Los Angeles.

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ShoulderTap Technologies Inc. d/b/a Fizz (“Fizz”) is not a bank. Banking services are provided by Patriot Bank, N.A. Fizz Mastercard Debit Cards (“Fizz Cards”) are issued by Patriot Bank, N.A. pursuant to a license from Mastercard® and may be used everywhere Mastercard® debit cards are accepted. Any loans you may be offered in connection with your use of Fizz’s services are originated by Lead Bank, a Missouri state-chartered bank. Any promotions or rewards you may be offered in connection with your use of Fizz’s services are offered and managed by Fizz, not our bank partners.

Increases or specific changes to your credit score are not guaranteed. Impact on your credit score may vary depending on your use. Fizz is required to report late payments, which may negatively impact your credit score. Credit scores are independently determined by credit bureaus based on a number of factors, including your activity with other creditors. The Fizz Card and related services will not remove negative credit history from your credit report. Fizz, on behalf of Lead Bank, will report your activities to Experian®, and Transunion®.For additional information, terms and conditions applicable to your use of Fizz’s services, please consult Fizz’s Terms of Use and Privacy Policy, the ShoulderTap Technologies Inc. d/b/a Fizz Consumer Cardholder Agreement, any Line of Credit Agreement in effect between you and Lead Bank and any and all other applicable terms, policies and guidelines made available to you through the Fizz services.

Testimonial Disclaimer: Review provided by customer to ShoulderTap Technologies, Inc. d/b/a Fizz directly. The comment above is related to individual experiences or results. Individual results may vary.

© Fizz Inc. © 2024 All Rights Reserved.


WeWork c/o Fizz; 154 West 14th Street; New York, NY 10011

ShoulderTap Technologies Inc. d/b/a Fizz (“Fizz”) is not a bank. Banking services are provided by Patriot Bank, N.A. Fizz Mastercard Debit Cards (“Fizz Cards”) are issued by Patriot Bank, N.A. pursuant to a license from Mastercard® and may be used everywhere Mastercard® debit cards are accepted. Any loans you may be offered in connection with your use of Fizz’s services are originated by Lead Bank, a Missouri state-chartered bank. Any promotions or rewards you may be offered in connection with your use of Fizz’s services are offered and managed by Fizz, not our bank partners.

Increases or specific changes to your credit score are not guaranteed. Impact on your credit score may vary depending on your use. Fizz is required to report late payments, which may negatively impact your credit score. Credit scores are independently determined by credit bureaus based on a number of factors, including your activity with other creditors. The Fizz Card and related services will not remove negative credit history from your credit report. Fizz, on behalf of Lead Bank, will report your activities to Experian®, and Transunion®.For additional information, terms and conditions applicable to your use of Fizz’s services, please consult Fizz’s Terms of Use and Privacy Policy, the ShoulderTap Technologies Inc. d/b/a Fizz Consumer Cardholder Agreement, any Line of Credit Agreement in effect between you and Lead Bank and any and all other applicable terms, policies and guidelines made available to you through the Fizz services.

Testimonial Disclaimer: Review provided by customer to ShoulderTap Technologies, Inc. d/b/a Fizz directly. The comment above is related to individual experiences or results. Individual results may vary.

© Fizz Inc. © 2024 All Rights Reserved.


WeWork c/o Fizz; 154 West 14th Street; New York, NY 10011

ShoulderTap Technologies Inc. d/b/a Fizz (“Fizz”) is not a bank. Banking services are provided by Patriot Bank, N.A. Fizz Mastercard Debit Cards (“Fizz Cards”) are issued by Patriot Bank, N.A. pursuant to a license from Mastercard® and may be used everywhere Mastercard® debit cards are accepted. Any loans you may be offered in connection with your use of Fizz’s services are originated by Lead Bank, a Missouri state-chartered bank. Any promotions or rewards you may be offered in connection with your use of Fizz’s services are offered and managed by Fizz, not our bank partners.

Increases or specific changes to your credit score are not guaranteed. Impact on your credit score may vary depending on your use. Fizz is required to report late payments, which may negatively impact your credit score. Credit scores are independently determined by credit bureaus based on a number of factors, including your activity with other creditors. The Fizz Card and related services will not remove negative credit history from your credit report. Fizz, on behalf of Lead Bank, will report your activities to Experian®, and Transunion®.For additional information, terms and conditions applicable to your use of Fizz’s services, please consult Fizz’s Terms of Use and Privacy Policy, the ShoulderTap Technologies Inc. d/b/a Fizz Consumer Cardholder Agreement, any Line of Credit Agreement in effect between you and Lead Bank and any and all other applicable terms, policies and guidelines made available to you through the Fizz services.

Testimonial Disclaimer: Review provided by customer to ShoulderTap Technologies, Inc. d/b/a Fizz directly. The comment above is related to individual experiences or results. Individual results may vary.