Graduating into hard times
By Lucy Lazarony • Bankrate.com

The real world just got harder.

The days of multiple job offers and signing bonuses for college grads are over, at least for now.

Making the leap from college to the real world and a good job is going to be tough. How tough is it?

Employers expect to cut college hiring by more than 36 percent this year, according to a survey by the National Association of Colleges and Employers. Blame it on a recovery that lacks oomph.

"The job market really hasn't opened up yet. It's slow. The economic signals are mixed. Employers are being cautious about hiring," says Philip Gardner, director of the Collegiate Employment Research Institute. "It's a very slow recovery."

The culprit is last year's recession. The economic slowdown wasn't so mild for new college grads. Job openings started tightening as early as January 2001 and have not picked up since.

This year's graduates will have to jostle with 2001 grads for the entry-level job openings that remain. And they'll have plenty of company. Many laid-off professional workers are in the hunt for jobs. They'll snap up an entry-level position whenever they can.

"There's a lot of labor that this graduating class has to get in line behind," Gardner says.

But it's not all gloom and doom for today's grads. Some will be able to snag high-paying professional jobs without a hitch. What's their secret? They've got degrees in fields that are hungry for workers.

Grads with bachelor's degrees in engineering, computer science and accounting are in demand. The insurance industry is pursuing grads with economics, finance, marketing and business administration degrees.

Other graduates will have a much harder time landing jobs. To crack a difficult job market, they'll need to be flexible. They may have to relocate or take a job outside their chosen field. It's important to think of a first job as a steppingstone to the job they ultimately want.

"There's nothing wrong with taking a job below where you'd like to be to build up a steady work record," says Andrew Sum, director of the Center for Labor Market Studies at Northeastern University. "You're always better off working than not working."

Begin your job search early. The first stop is the career center on campus. A career adviser can help you fine-tune your resume.

"I've assisted hundreds of people with their resumes, and I've rarely looked at someone's resume and said, 'This is great, don't change a thing,'" says Linda Gooding, a counselor at the Student Success Center at North Harris College in Houston. "Most people don't know how to sell themselves properly on a resume."

You'll also want to polish up on your interview skills. Many campus career centers offer seminars on job interviews and job hunting. Sign up for everything you can. The more comfortable and confident you feel about the interviewing process, the better off you'll be.

Landing a job in 2002 is going to take a whole lot of research. So dig in and get going. Join professional organizations. Attend conferences and meetings in your area. Subscribe to publications in your field.

Network until you drop. Sound the alarm and tell everyone you know that you're in the job hunt. Ask them to spread the word.

"A lot of getting a job is networking," says Nancy Dunnan, author of How to Invest $50-$5,000. "If they're looking for a job, they should turn to family and friends for ideas."

A neighbor or co-worker of a parent may be able to steer you in the right direction. Contact past members of a fraternity or sorority and other campus organizations. Re-visit your old high school. Tap every contact you can think of.

Getting your foot in the door
When you land that all-important interview, know everything there is to know about the company before you step in the door.

"Research the company and the position before you come in for the interview," says Mimi Collins, a spokeswoman for the National Association of Colleges and Employers. "Do your homework. Show your interest."

Consider taking an internship, part-time work or volunteer work in your field. These types of positions are a good way to get your foot in the door. They may lead to a full-time position with the company or organization. At the very least, the experience you gain and contacts you make will help with your job search.

Dunnan knows of six recent graduates who volunteered with nonprofit agencies in New York City. All six had full-time jobs within six months.

Make the most of your first job out of college, even if it's not your dream job. Learn as much as you can, but don't get too comfortable. Stay on the lookout for bigger and better opportunities.

"You've got to have a plan to where you want to go next," Gardner says. "People who don't, tend to get stuck there."

First job, first budget
You'll also need a plan for handling your money. Mapping out a budget is a good place to start. Don't worry. It's not going to be as bad as you think.

"It doesn't have to be a budget that drives you crazy," Dunnan says. "But you do need a budget."

At the very least you've got to get a handle on set expenses, such as rent, utilities, car payments and minimum student loan and credit card payments. How much of your monthly take-home pay will these expenses eat up? Is it 75 percent of your money for the month? How much money is left over for food and fun?

After you've got a handle on the bills you must pay every month, it's time to take a closer look at day-to-day spending. Have you ever wondered how the $40 bucks in your wallet could disappear so fast? Tracking your spending for a few weeks will give you the answer.

"At least for a couple of weeks write down your spending and decide what you can do without," says Jason Anthony, co-author of Debt-free by 30: Practical Advice for the Young, Broke, & Upwardly Mobile.

"Almost half the battle is knowing where your money is going ... How much money did you spend last month on coffee?"

Do yourself a huge favor: As much as you can, avoid running up credit card debt. Carrying big balances on high-interest rate credit cards can really drain your wallet.

"The high interest rate credit card debt is the thing you really want to chip away at," says Beth Kobliner, author of Get a Financial Life: Personal Finance in Your Twenties and Thirties.

Pay more than the minimum payment on your credit card every month. Even an extra $10 a month can make a difference.

This article from Bankrate.com discusses a number of strategies for paying down card debt, including freezing your minimum payment.

Good debt, bad debt
Always, always pay your bills on time. Establishing a good payment record will help you qualify for a credit card with a lower interest rate. Transferring a balance to a card with a low interest rate can save you a bundle. This Bankrate.com worksheet will walk you through the steps.

You want credit card debt out of your life as soon as possible. Student loan debt is less of a worry.

"I classify that as good debt," Anthony says. "You should attack your credit card debt first because the interest is higher, much, much, much higher."

As long as you can make your monthly student loan payments you're in good shape. Interest rates on student loans are quite low and look to stay that way.

Last July, the interest rate on federal Stafford loans dropped from 8.19 percent to 5.99 percent, its lowest rate in decades. The rate remains in effect through June 30, 2002. The Stafford program is the largest source of student loan funds in the country.

The U.S. Department of Education sets variable loan rates each year based on the rate for 91-day Treasury bills at the last auction in May. That rate could be even lower this year, thanks to several interest rate cuts in mid and late 2001.

So there's a good chance Stafford loan rates will stay well below 6 percent from July 1, 2002, to June 30, 2003. That's great news for all student loan borrowers.

Consolidate?
If you're struggling to make your loan payments, you may want to consider signing on for a consolidation loan. A consolidation loan can lower a borrower's monthly loan payments by as much as 40 percent and can also stretch out the repayment period.

A consolidation loan also locks in a single rate for the life of a loan. The rate is based on the interest rates on loans you already have. It's best to consolidate loans when interest rates are as low as they are now.

Information, applications and calculators for consolidation loans are available on the USA Group and Sallie Mae. Borrowers can also contact their lenders with specific questions on consolidation loans.

Grads facing serious financial problems may be able to get their loan payments postponed or deferred. Be sure to contact your lender and ask about deferment and forbearance programs.

Once you map out a realistic but not suffocating budget and get a handle on your credit card and student loan debt, you're ready to take on the real world -- tough times and all.

-- Posted: May 29, 2002