At the start of 2020, the U.S. economy was generally healthy, with record low unemployment and strong consumer confidence. But amid the COVID-19 pandemic and ongoing uncertainty, unemployment soared, the economy slowed and consumer confidence declined sharply.
Even as the economy slowly begins to restart, new graduates will likely have a particularly challenging time finding jobs this year. That doesn’t mean that it is impossible – but they will need to be smart about the searches and have a few other plans in place.
For those who have loved ones in the class of 2020, we’ve gathered a few tips to share with the graduate:
Be aggressive when it comes to job searching. Looking for a new job is hard, even under the best of circumstances. While your grad may have a lot of talent to offer, the competition will be extra fierce. When looking, they shouldn’t just think about their majors when considering who might hire want to hire them. They should think of all the skills and experiences they have to offer an employer and pursue roles that match. Remind them that their job search could take weeks or months – likely longer than usual in this environment. They can use that time to update their resumes, build up experience through internships and part-time jobs, and network at every opportunity.
Be conservative with spending. First things first – work with your grad to create a budget if they don’t already have one. Help them prioritize and decide where they can cut expenses: cheaper phone plan? Unneeded subscriptions? Lay it all out and make some decisions. Guide them to stop using any credit cards they may have, and try to pay more than the minimum to pay off the balance faster and make it easier to save.
Sign up for health insurance. Not getting sick or injured is not a good health plan – they shouldn’t take any unnecessary chances with their health, especially in this environment. The good news is, as a new graduate, an adult child can stay under a parent’s plan – even living in a different location – up until age 26. If that isn’t an option, there are healthcare plans through www.healthcare.gov that they can explore if they don’t have coverage through a job. Note that individual or short-term, limited-duration health insurance plans could be cheaper in the short run but can be extremely costly over the long run if the holders do get sick.
Know the rules of student loans. For most federal student loan types, after graduating or leaving school, your grad has a six-month grace period (sometimes nine months for Perkins Loans) before payments are due. Because of COVID-19, the U.S. Department of Education is now suspending payments on most federal student loans from March 13, 2020 through Wednesday, Sept. 30. No interest or penalties will accrue on loans during this time. Normally, for most loans, interest still accrues during any grace period. After Sept. 30, this payment suspension and interest waiver will end.
That said, if your grad is able to make payments during this period, they should. If they can afford it, the payments they make will go toward the principal balance, reducing the total amount they pay and helping pay off the loan faster. But, be sure to encourage them to check with their lender.
If your grad was fortunate enough to have secured a job and have a steady income, make sure they are prioritizing saving for their future. If their company’s retirement plan offers a 401(k) match, they should be contributing at least up to the maximum match offered to ensure they aren’t leaving easy money on the table. It is also important that they factor saving for an emergency fund into their budget. This fund should ideally cover three to six months of essential expenses, but any amount they are able to set aside and save helps. Finally, if possible, they should also consider opening a separate IRA to further safeguard their futures.
We recognize these are uncertain times and the way ahead may look quite different. Don’t be discouraged; instead, exude determination, persistence, energy, enthusiasm and optimism to create a successful path forward.
Speak Your Mind