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The CJP Meltdown Survival Guide, with Anya KamenetzBy Nisha | December 11, 2008
Even though we’ve all been distracted by Rod Blagojevich’s shenanigans this week, the Am-Ex bill is still waiting for you to pay up, so we asked Anya about the recession, growing student loan debt, and how to be the most financially-savvy Jane around… CJP: How is the current economic situation affecting women in particular? Are there unique challenges that women are facing? Anya: There has been some evidence that women are more likely to be pushed out of the workforce in recessions, and women saw their worst-ever unemployment spike this fall. The key tipping point for women in particular is whether they can find a job that pays more than their child care costs. If not it makes more sense to stay home, even if that keeps their family in poverty.
CJP: What do you see as the biggest financial/economic challenges facing young women in this time?
Anya: Paying off student loans and credit card debt, while negotiating those early career transitions in a down market. Young women are more likely to be worried about their health insurance too because we’re supposed to go to the doctor twice a year. I just got off the phone with a friend who is worried about losing her’s.
CJP: In your experience, are young women prepared to manage their finances in this period? What steps can they take to be better informed and protect their finances?
Anya: First, go to annualcreditreport.com and read your credit reports. Figure out what you need to do to pay down debt. Try a service like Mint.com to help you manage spending and target categories for paring back. And start saving, even a tiny amount . It’s important to get in the habit.
CJP: What do you think all the bailouts mean for the next generation of taxpayers?
Anya: Nothing good. The deficit is going to top a trillion dollars!
CJP: With state and philanthropic funding down, tuition costs are going up. How much in student loans is too much? When should you choose a cheaper school?
Anya: A useful rule of thumb for student loans is if your total is greater than the starting salary in your field, that’s too much. For the average BA that’s about $35,000. I predict we’ll see far more families trading down to public schools, community colleges, distance learning, overseas colleges, and other alternatives. And that might be a good thing. Tuition increases like we’ve been seeing for the past 20 years are clearly unsustainable.
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