Whether you’re prone to believing that kids should just be kids for as long as possible or that they should get off their spoiled butts and start pulling their own weight, the financial tumult we’ve endured in recent years has made clear how important it is to start sowing the seeds of a successful financial future early.
We saw a 23-year-high unemployment rate in October 2009 (10.0%), at which time 15.7 million people were out of work in the United States. We saw more than 10% of all credit card users fall so far behind on their bills during the first half of 2010, that banks legally had to write their debt off the books (the consumers still owed it, however). And we’ve also seen U.S. consumers rack up more than $86 billion in new credit card
Now, while there are some bright spots in the job market forecasts for young people, student loan debts are in excess of $1 trillion and unemployment rates among recent graduates are still high. Just consider the findings of a recent Economic Policy Institute study:
Young Employment: By the Numbers
Young High-School Graduates:
- Unemployment Rate: 29.9%
- Underemployment Rate: 51.5%
- Pre-Recession Context: In 2007, unemployment among young high-school graduates was at 17.5% and only 29.4% was underemployed.
Young College Graduates:
- Unemployment Rate: 8.8%
- Underemployment Rate: 18.3%
- Pre-Recession Context: In 2007, unemployment among young college graduates was at 5.7% and only 9.9% was underemployed.
There are a couple of things that we can take away from all this. First, having a college degree is clearly important. Second, the job market is extremely competitive no matter what age you are or how much schooling you have.
In short, that’s why high school and college students should leverage the summer break to maximize their career prospects for their future. This doesn’t mean summer should be all work and no play, but rather that strategically using a portion of your free time can really pay dividends down the road.
How, you ask? Well, we consulted a number of career counselors, family science professors, labor market experts, and financial advisors for insight into that very question. Here are some of the highlights of what they had to say.
- Think First, Then Do Your Homework: “I recommend students think about the skills they want to acquire, and companies they may want to intern for,” Stacey Bales, academic success specialist with Arizona State University’s Fulton Schools of Engineering, said. “I recommend they develop and refine their resume to pertain to the internships they are seeking. Once they have done those steps I recommend they attend job/internship fairs to be able to network with employers and be able to see what is available for their major area of study.”
Give Yourself Credit: First of all, if you’re reading this article you’re already head of the curve, so you can give yourself credit for that much at least. That’s not really what we meant by “give yourself credit,” however. Rather, you should make it a priority to literally open a credit card account. Credit cards relay information to the major credit bureaus on a monthly basis, which makes them the most easily accessible and efficient credit-building tools available. As long as the information shows that you’ve made on time payments and aren’t maxing out your card on a regular basis, your credit standing will gradually rise.
Not only will having established credit save you a lot of money on future loans and insurance premiums, but it could also make it easier to land a job. Many employers use credit report data to evaluate the overall responsibility of potential hires.
“If individuals have fiduciary responsibilities as part of their job, then credit checks can be informative,” Jill Ellingson, an associate professor of human resource management at The Ohio State University, said. “Such checks can reveal elements of fiduciary integrity as well as highlighting the credit risk that a particular individual brings. Individuals facing financial challenges may be more prone to take questionable or illegal actions in conjunction with their access to firm funds.”
- In College, Seek Internships: “For college students I try to encourage they use 1 or 2 summers interning during their college experience to better distinguish their strengths/weaknesses and to help determine options for potential future career fit,” Bales said.
- In High School, Gain Experience & Build Life Skills: “For high school students sometimes it can be more about volunteering their time to an organization they would like to learn more about that aligns with their interests and to help further develop their skills,” Bales said. “Any job or experience can be beneficial to build work ethic and can be an experience that you can learn from and take with you in a future job.”
- When In Doubt, Think Versatility: “People who are uncertain of what they want to do for a career should look at finding a position that will provide transferable skills that will be beneficial in a variety of careers,” Bales said. “I think it also depends on the person’s interest. So if a person likes to help people and wants to work in field that is accomplishing that they should look at a variety of positions and employers that will encompass that opportunity. For people interested in the business field they could consider retail, sales, banking, etc.”
- Always Be Networking: “Our advice keeps coming down to one main word: Network, network, network!” Barbara Laporte, director of career services in the University of Minnesota’s School of Public Health, said.
So, as schools across the country close their doors for summer, remember that you can open some of your own if you go about things the right way. Whether this entails caddying at the local country club in order to schmooze it up with business big-wigs or donating time to a noble cause (and great resume addition), you can rest assured you’re setting yourself up for a brighter future.