Posts Tagged ‘recession’

It seems like every day there’s a new area of the economy hurt by the current recession.

Unfortunately, today’s no exception. A recent report in the The New York Times suggests that student loan forgiveness programs may be in danger of diminishing, which could be bad news for the country.

What Is Loan Forgiveness?

Loan forgiveness works by adding incentives for doing certain types of work: In exchange for agreeing to work in specific fields, usually in a pre-determined area of the country, for a set number of years, the state will forgive a certain amount of your student loan debt. Currently, the government forgives loans for:

  • Math, science, special education, foreign language and other shortage-area teachers
  • Teachers in low-income areas
  • Social and childcare workers
  • Peace Corps volunteers
  • People with law and medical degrees working in areas in need of their services

Forgiveness programs have several benefits. Here’s an overview of how they work:

  • Students choose jobs with relatively low incomes but high value. For example, someone with math or science skills may choose to teach rather than go into banking right away, knowing that a few years in the classroom will eliminate most or all of her student debt.
  • Communities in need of skilled professionals get the workers who can help them. Most government programs work by identifying specific places, usually low-income areas, where graduates can work to have their loans forgiven.
  • Recent graduates eliminate worry often associated with educational debt. Because student loans cannot be discharged in most bankruptcy filings, it’s important for graduates to repay them, and forgiveness programs help them do so.

Recession = Less Loan Forgiveness?

Now, many states are struggling to balance their budgets and forgiveness programs are reportedly seen as non-essential in many cases.

And the federal government and private sources of income are similarly strapped, which translates to less money all around.

It’s not hard to figure out what this could mean in the long run: current students will be less likely to enter low-paying fields because they’ll have heavy loans to repay.

Those currently in loan forgiveness programs may look for better-paying work elsewhere if their forgiveness amount is cut. And communities in need of competent nurses and teachers will suffer.

If you're neck-high in debt, take some time to learn about filing bankruptcy.

Friday, May 29th, 2009

How We’re Coping with the Recession

By now, you’ve probably heard classic advice on how to survive a recession: buy generic, pare extra costs, focus on necessities ... But are we actually taking the advice pouring at us from so many news outlets?

According to a recent article in USA Today, we are.

It seems we are spending money, albeit not on new gadgets and glamorous accessories.

Here are some sales figures from various U.S. vendors:

  • Sales at Goodwill Industries are on the rise, with a reported 7 percent increase in March from a year ago.
  • Shoppers used 10 percent more coupons in the fourth quarter of last year than in the third, indicating that pinching pennies is growing more popular.
  • Rather than splurging on nights out, Americans are funneling their funds to existing debt, as evidenced by a 2 percent decrease in consumer borrowing in the first quarter of this year and a 6.5 percent decrease in revolving credit.
  • Figures from the National Association of Home Builders show that Americans are spending more on repairing and remodeling their houses. Though numbers are still below what’s considered ideal, they’ve jumped significantly since last year.  (Read about foreclosure and the recession)

Traveling in a Recession

A recent Associated Press article  reports on the rising popularity of home-swap vacations for travelers looking to cut costs but still get away from home for a while.

Most experts recommend joining an online home-swap Web site to eliminate some of the risks associated with trading houses with strangers.

People who want to get off the beaten tourist track on their voyages may enjoy the home-swap experience – but even if you don’t have a house to offer in exchange, you may be able to travel for a fraction of traditional costs.

Another recession-friendly trend is the couch-surfing experience. (Check it out!) Again, you begin your trip online and find hosts in the area you’d like to travel with a lifestyle that matches up with yours.

For more tips on how to make the most of your limited travel dollars, check out this article about how to travel on a budget.

--Has the recession hit you really hard? Are you finding it difficult to make ends meet, much less pay bills? Learn about filing bankruptcy.

Wednesday, May 27th, 2009

Thrifty Tips Now Hip as Recession Lingers

In some aspects, it could be considered a great time for folks who are filing bankruptcy: with the economy in the worst recession in recent memory, it’s suddenly cool to be thrifty .

Here’s a look at some traditional post-bankruptcy wisdom that’s seeing new life in the down economy.

Post-Bankruptcy Move #1: Cut back on spending
The fresh financial start bankruptcy can offer is great, but it only really works if you’re able to maintain your debt-free status.

Those recently out of bankruptcy have always been encouraged to shop with detailed lists (and stick to them!), switch to generic brands, carpool, buy secondhand clothes and the like to save money.

Recession Twist: Swap, barter or share to get stuff free (or cheaper).
These days, it seems everybody is looking to cut costs. It’s no wonder, then, that sites like Meetup.com, Swaptree.com and Paperbackswap.com are springing up to help bargain-minded Americans trade their old stuff and save.

And some especially resourceful individuals are chipping in for costly items and sharing them.

Post-Bankruptcy Move #2: Design and stick to a budget
As you get your finances back in order, it’s important to have a plan for where your money needs to go each month. And, while the word budget may have been a "dirty" word once upon a time, these days it’s a must-have.

Recession Twist: Look outside your comfort zone for terrific deals.
Maybe you don’t have money to travel like you used to (and “staycations” are so 2008), but summer on a budget doesn’t have to mean three months of boredom.

Check out events that you might not normally consider attending: movie nights at the local library, amateur music at outdoor parks, even special deals on hotels in your area.

Bargains are everywhere (one benefit of a recession) – take advantage of the price cuts businesses are offering to stretch your budget to its limits.

Post-Bankruptcy Move #3: Develop savings strategies
A savings cushion could mean the difference between swimming and sinking when a financial disaster hits. In your post-bankruptcy life, it’s crucial to make regular, consistent savings a key part of your cash management.

Recession Twist: Get the whole family involved.
As a nation, we’re saving significantly more money now than we did a year ago (nearly five percent of income in ’09 compared to almost nothing in 2008). Take this opportunity to teach your kids about the importance of savings – help them start bank accounts, savings jars, piggy banks, etc.

And make savings an important part of your family’s life – set goals for yourselves (vacation, pizza night) and work together to reach them.

Bottom Line: Make the Most of It

The recession’s got plenty of negative features, but you don’t have to dwell on them. Take advantage of all the benefits it can offer you!

Wednesday, May 20th, 2009

10 Ways to Recession-Proof Your Job

These days, having to get up for work every morning may seem a little less of a drudgery ~ with unemployment rates steadily creeping upward, many of us are just happy to be employed.

And, while there’s no failsafe way to ensure that your company won’t cut your job, there are some techniques to improve your odds of retention.

Here are some tips, culled from a variety of news sources, for hanging on to your employment and your paycheck.

  1. Think Frugal: If you can find a way to cut costs or bring in extra money for your employer, be sure to suggest it and then volunteer to get it started. It could be something as simple as offering to lay in supplies of the office’s favorite coffee when you see it go on sale.
  2. Be Seen: Make sure your boss and coworkers know you’re on duty, especially if you’re putting in extra hours. You can do this without going overboard by greeting everyone with a “hello” when you come in and a "good night" when you're still chugging along at your desk and they're heading home.
  3. Talk Yourself Up: If you’re doing something positive for the company (see first item), don’t hesitate to let your superiors know--but don’t overdo the self-promotion. A simple e-mail to your boss letting her know you’ve gotten a project done early may be all you need.
  4. Get (and Stay) Busy: This is not the time to be "caught" playing Solitaire on your computer. Focus on your work and don’t hesitate to volunteer for new projects.
  5. Take Initiative: Don’t wait for someone to complain about an empty coffeepot or announce beneficial classes being offered. Research the latest skills that might benefit you and your coworkers and send a group e-mail if you notice a speaker or class offered that might improve your productivity.
  6. Stay Current: Find out where your company stands so you won’t be shocked if layoffs do come into town.
  7. Don’t Get Too Comfy: Even if you think your job’s safe, now is not the time to let yourself slack: be punctual and keep your complaints to yourself. Don’t pass up chances to network with others in your field, either--you never know when you may need that connection.
  8. Lend a Hand: Whether it’s volunteering to assist in a new project or passing on the resume of a recently laid-off coworker, take care of your peers. They’ll return the favor.
  9. Stay Informed: Find out what’s going on in your industry, whether or not you think you’ll need the information immediately. You never know when you’ll be in the elevator with the CEO and have a chance to drop something in conversation.
  10. Smile: Don’t underestimate the importance of being pleasant. It’s much easier to let go of grumpy employees than ones who seem happy.

Even if you do lose your job and find yourself in dire financial straits, don’t panic. The government’s bankruptcy Code exists because sometimes, ends don’t meet.

Hang in there: no recession can last forever.

According to a new study, nearly two-thirds of teens and young adults aged 12 to 29 admit they are becoming increasingly concerned about their personal finances.

TRU, a youth research firm, conducted the “3rd Wave" study by examining the upcoming buying intentions of 1,300 teens and young adults.

The study showed that 44 percent of people between the ages of 12 and 15 were concerned about the recession.

In addition, 71 percent of those between the ages of 20 and 29 expressed an increasing concern over the failing economy.

Teens Are Holding Back the Cash

TRU asked the teens and young adults to indicate whether they anticipate spending more, less or the same in particular categories of purchases over the next 12 months.

The majority of those surveyed said they expect to spend less on electronics, restaurant meals, snacks and entertainment.

However, they did expect to spend the same amount as they currently do in categories such as housing, transportation and food costs.

Fast food is out in the coming year, as 75 percent said they would be hitting the drive-thru less often over the next 12 months. Seven out of ten survey respondents also said they plan to eat more meals at home.

Dinner and a movie at home may be the new trend, as 53 percent said they would be staying home more.

More than 25 percent of people 20-29 said they may consider getting a second job and one-fifth said they would shop at second-hand stores in the coming months.

Learn more about filing bankruptcy as a debt-relief option?

Read more: How to Tame the Debt Dragon

Government reports show that we lost 63,000 jobs in February.

That's 63,000 people who don't have the paychecks they count on.

It's the largest falloff in that sector in five years.

Expect bankruptcy filings to go up again.

More jobs lost = more people filing bankruptcy.

So, this begs the question: Hey media: When does the word "recession" come in to play in earnest?