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'Take It From Me': Living and Learning Through a Recession

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Brandon Lee
Brandon LeeUpdated November 8, 2022
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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or partners. Read more about our Editorial Guidelines and How We Make Money.
Another generation—another recession. Today, rising interest rates, falling retail sales, and stock-market declines could all lead to a period of recession in the coming years. This may sound all too familiar for a group of Millennials who had to enter the workforce during the economic downturn of 2007-2008 known as the Great Recession.With an uncertain future ahead, we wanted to find out: What can today’s college graduates learn from those who also graduated during a time of intense economic uncertainty?We surveyed 1,000 people who graduated in 2007 or 2008 to determine how the recession affected their careers and financial decisions. And we interviewed multiple Great Recession graduates about their personal experience to gather additional insights for today’s graduating class. In 2007 and 2008, unemployment rose sharply. The crisis was driven by specific housing market and corporate conditions. Nonetheless, we found parallels between the Great Recession and today’s economic climate.  Jennifer Darnell graduated college in 2008. She said, ”How I feel today about the economic climate is how I felt in 2008, and I never really could voice my grievances because it just wasn't relevant … That feeling in this economic climate looms over me. I see people doing exactly what they did in 2008. Buying up electric cars and over-the-top price housing.” Let’s dig into the findings to see what lessons today’s college graduates can learn from those who entered the workforce during the Great Recession.

Key Findings

  • 71% of survey respondents landed a job within six months of graduating. Only 8% of respondents took longer than a year.
  • 68% had to start repaying their student loans before they had a job. 
  • 54% advise new grads to pay off their student loans as soon as possible and pay more than the minimum amount whenever they can. 
  • 69% had to move to a different city to find a job. 
  • 39% say that overspending on non-essentials (e.g. dining out, buying clothes or other items you didn’t need) was their greatest financial mistake.

Finding a Job After Graduation

While the main purpose of attending college is to obtain a job after graduation, some graduates have difficulty finding career options. During the Great Recession, did college graduates have even more trouble finding the right job due to economic instability?Surprisingly, 71% of respondents say they landed a job within six months of graduating. This lines up with a recent 2022 Bureau of Labor Statistics survey, stating that a job seeker takes an average of about five months to find a job. So, what helped these new grads successfully find jobs during the recession? According to Mike Gardon—who attended graduate school during the Great Recession—networking and referrals made it easy to secure great career opportunities in a scarce market:“I made networking my full time job on top of MBA classes. I met with anyone I could, and as a school project, I also created a business plan and fundraising strategy for a friend's business. By the time I was ready to graduate, I networked my way to a team at Deloitte which newly created a position for me and I had just raised $600,000 for the friend's business.”While many may believe those who graduated during the Great Recession had trouble finding jobs, this isn’t necessarily the case. This is welcoming news for today’s college graduates, especially as unemployment remains low in a concerning financial climate. According to Mike, finding a job in any economic state is based on how well you take advantage of networking opportunities.“The moral of the story is that the antidote to uncertainty is options. Not every opportunity will pan out, but when you have multiple options, your odds of success are higher. Relationships are currency. Build them well and increase your chances of getting lucky.”

Landing a Job May Not Take As Long As You Think

During the Great Recession, only 8% of respondents say it took longer than a year for them to find a job. Surprisingly, 20% of them got a job in less than a month. As mentioned above, it took less than six months for a majority of our respondents to find a job during the Great Recession.

A Variety of Tactics May Help You Land a Job Offer Faster

When we asked respondents what helped the most when it came to landing a job, the responses were varied. 
  • The most common response (28% of respondents) was that applying to as many places as possible helped them find jobs faster.
  • 25% of respondents said that using a reference and their referral networks was the most effective solution. 
  • 19% of respondents said that accepting a lower salary than they originally had in mind was helpful. Though, with today’s skyrocketing inflation, that advice may not be ideal for today’s college graduates. 
  • 18% of respondents said regularly revising and updating their resumé helped the most. 
  • 8% of respondents said that, ultimately, applying for jobs they didn’t originally want helped them gain employment.

Seek Encouragement From Your Entire Network

It goes without saying that searching for the right job—or any job—can be stressful and downright discouraging at times. When asked who provided the most encouragement during the job searching process, 34% responded with a family member. In the survey, 22% of respondents received inspiration from a teacher or mentor and 9% leaned on encouragement through their spirituality.

Where to Live to Find Work

The Great Recession impacted the lives of college graduates in more ways than one. Some 69% of our survey respondents had to move to a different city just to find a job–or go farther than that. Alternatively, work-from-home jobs are much more prevalent and accessible today than during the Great Recession. This gives today’s graduates additional leverage and options that were harder to come by 10 or 15 years ago.

Consider Moving Back Home — but Not for Too Long

If you’re a college grad and having trouble finding a job after graduation, you can always consider moving home to save money and search without the stress of paying bills. We found 69% of survey respondents moved in with their parents or guardians after graduating. However, moving out took a little time. Only 11% of that group were able to move out in less than a year. Ultimately, moving in with your parents or guardians is a great way to save money while you look for a job. Though you should have an exit strategy in mind.  Of the respondents who moved in with their parents, 68% of them said they regretted their decision and wished they had gone out on their own.

Moving Home May Help You Feel More Prepared for the World

It’s common for new college graduates to need more time to get on their feet. In fact, only about a third of survey respondents (32%) said they were “very prepared” to go out into the real world during the Great Recession. Interestingly enough, of those who felt “very prepared,” 84% moved in with their parents after graduating. As mentioned, moving in with parents or guardians can be a great way to ease into life after college by saving money. The takeaway for recent graduates here is that it’s important to take the time you need to stabilize your life before going out on your own, even if this means living with your parents.

Budget and Spending

Unless you secure a high-paying job right after college, money is naturally tight. Creating and sticking to a monthly budget is one of the best ways to stay on top of your finances as you settle into the right job. Ignoring this step can lead to financial consequences you may regret later. During any recession, stable jobs are scarce and every dollar counts. According to Gregory Lenzo, who is now a chief financial officer, the uncertainty of the Great Recession took a toll on people’s finances.“For those who were just entering the job market or graduated during the recession, finding a job was difficult. Unemployment rates were high, and many jobs that were available paid lower wages than those in the past. For those who were able to find a job, the work was often unstable or required moving to a new city.”

Create a Budget to Help Balance Your Spending

It’s hard to argue that budgeting is ever a bad idea. Creating a budget helps college graduates adapt to their new financial situation and understand what they need to cover their expenses.Two-thirds (67%) of respondents created a monthly budget after graduating to help keep track of expenses. On the other end of the spectrum, failing to budget can lead to future regrets: Some 23% of respondents said they didn’t create a budget and wish they had.

Try to Limit Spending on Non-Essentials

A major part of creating a budget is avoiding unnecessary purchases. We asked respondents: What was your biggest financial mistake after graduation? 
  • 39% said they overspent on non-essentials (e.g. dining out, buying clothes, or other items they didn’t need)
  • 18% said they made risky investments
  • 13% said they didn’t invest into a savings account
  • 12% said they did not create an emergency fund
  • 12% said they failed to create a budget and stick to it
  • 6% said they did not refinance their student loans
Jocelyn graduated in 2007 and says the ebbs and flows of the Great Recession made her fearful of overspending. “I became obsessed with saving and minimalism. I avoided debt like the plague and did everything in my power to live below my means. There was this sense that my livelihood could be ripped away from me at any moment, and I needed to be prepared.”What does this mean for new grads today? By creating a strict budget and sleeping on purchasing decisions, you can avoid impulse spending and save for the future.

If You Can, Start Contributing to a Retirement Account ASAP

Most would agree that the earlier you start saving for retirement, the better. Most survey respondents started contributing to a retirement account early, and don’t regret it.  In the survey, 72% started contributing to a retirement account (401k, IRA, etc.) within a year of graduating. Of that group, 88% said it helped provide peace of mind. Conversely, 28% did not start saving for retirement within a year of graduating. Of that group, 77% say they wish they had started saving sooner.

Financial Advice Is Split

We asked respondents what advice they’d give to today’s college grads in the event of another recession.The responses were split between how to best spend and save. 
  • 38% say to limit your spending and put extra money into savings
  • 35% say to prioritize paying your bills and create a budget for nonessentials 
  • 27% say you only live once—as long as you have your bills paid, feel free to spend on non-essentials
So, what’s the takeaway here? While everyone has different experiences and advice when it comes to managing finances, most would agree that today’s grads should make sure they at least have enough money to cover their bills and basic expenses. From there, it’s up to the individual to decide whether living in the moment and spending on non-essentials is more important than thinking of the future.

Student Loans

Student loans are a stressor for many new graduates, regardless of economic climate. However, tough financial times may make payments an even larger strain.  It’s worth noting we conducted this survey after federal student loan forgiveness was announced in late August 2022.

If You Have Student Loans, Get Ready to Pay

According to our survey, 68% of respondents had to start repaying their student loans before they had a job. The majority of respondents (54%) advise new grads to pay off their student loans as soon as possible and pay more than the minimum amount whenever they can. By creating a budget and paying more than the minimum loan payment, you can avoid paying extra interest later and knock down your debt sooner. Additionally, 24% of respondents say new college graduates should consider refinancing their student loans.

 If Your Payments Are Hard to Manage, Consider Refinancing

In the survey, 62% of our respondents refinanced their student loans. And 88% of those who did said they were glad they refinanced, as it made their payments more manageable. Conversely, of the 38% of respondents who didn’t refinance their loans, 43% of them regret their decision.  Refinancing your student loans can be an effective way to lower student loan payments. However, refinancing isn’t the best decision for everyone. Typically, it makes sense if you have better credit now versus when you originally took out the loans, and can qualify for a lower rate.

How Respondents Are Doing Today

The Great Recession brought many difficulties for young college graduates. And some felt these challenges were difficult to overcome. William Hsu graduated in 2008 and opened his own insurance agency a few years later. The long-term impacts of the recession made him consider quitting.“In the end, I struggled for five years before truly experiencing any success. It was a grind, and one of the most challenging periods in my career. There were long stretches of time where I felt like I should quit.”Yet despite the challenges of the Great Recession, the majority of our respondents are objectively doing well today. Nearly 70% of them have an income of $100,000 or more, and only 6% of respondents make under $50,000.  Hsu adds, “Fast forward to 2016, things were very different. People had more money in their pockets and business boomed. I’m glad I stuck around. Nowadays, I have the time and freedom to focus on other businesses that interest me.”This is great news for new college grads who may feel uncertain. While graduating during a recession may be challenging, there are still opportunities for success.

Advice for Recent College Graduates

Graduating during a recession has definite ups and downs. Remember, while 71% of respondents landed a job within six months of graduating, 69% had to move to a different city to find a job. This shows that finding career success after a recession can be unpredictable. Pressing on through these tough times can lead to the success you’re looking for. Take, for example, the story of Amber. “I was very adamant about searching for a job in radio and even traveled to different states (which is common in radio) to interview. At that same time, one of the biggest radio companies in the U.S. downsized and started overlapping staff and having them work for multiple stations.”Because of the recession, Amber faced low-paying and sometimes scary jobs to make ends meet. “In the meantime I waited tables and tended bar. When I did finally land a career-focused position after graduation, which was almost a year later (May 2008), it was a joke. The person I was hired by wanted me to be an office assistant but quickly turned into asking me to forge documents and sell insurance illegally. I quit immediately and went back to serving to pay the bills.” In the end, Amber worked her way up the ladder at a boutique resort to become Director of Operations, crediting her hard work and adaptability through the recession. “I wouldn't be where I am today without these experiences. There is no point in making excuses. I will continue to push forward with the talents I have worked so hard to obtain and know that at the end of the day, I love what I do, my clients love what I do, I'm happy doing it, even if it doesn't make me millions. Because, isn't that true success?”If there is any effective advice for college graduates, it’s to prepare for every possible outcome and make the most of hard work, networking, and your support system to survive and eventually thrive in any recession. Note: Some responses have been edited for clarity.

About the Author

Brandon Lee

Brandon Lee

Brandon has written for hundreds of companies across the world for more than a decade. He specializes in topics such as technology, finance, crypto, and marketing.
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