Posts tagged with broke.

Running out of money

Ian Wylie, January 22, 2009 at 12:05 PM

 

I'm close to broke. I spent the last of my education savings this week on a textbook I'd been putting off buying because I knew it put me over the edge. All I have left now is some measly contingency funds in case of emergency. Being broke is part of the student experience. However, being broke in the midst of the greatest economic crisis since the great depression is a little more unnerving. 

 

In October, my economics professor announced to our class that the job market will be thin when we graduate. We better get good marks or face unemployment, he said. After his announcement, the three things that make debt look manageable (free money, employment and parents) began to look increasingly unreliable.

 

Scholarships and bursaries were free money. Yet the endowment funds sustaining them took a beating these past few months. Like at a lot of universities in Canada, U of T's lost a lot of money. There's a chance even need-based student aid will be affected. As for the free money, it will be hard to come by.

 

As for my employment in the short term, I hope someone will hire me this summer. Canada's present unemployment rate (6.6%) is far from what it was during the last recession (7.8%, in '91-'92). Yet business is certainly not as usual. At home in Calgary, you used to get a free iPod and $13 an hour at the Tim Horton's. And that's on top of the free coffee and donuts. However, cranes in Calgary now stand still and Alberta has the fastest rising unemployment rate in the country.

 

Looking ahead, the job market will be tight when I graduate. The economist Richard Lipsey predicted in a recent Globe article   that Canada will be in a recession for at least two years. By the time I'm done my undergrad, it will be in a slow recovery. It doesn't help that baby boomers, who were supposed to retire, are staying at their desks after seeing precipitous drops in their savings.

 

Baby boomers losing money is bad for university students in another way. Many of our parents are baby boomers. The glorious fount of monetary gifts and no-interest loans proffered by our well-established-in-their-career parents has dried up. Because their "quality of life" in retirement is threatened, our education is threatened. Not really: government is always around to help out. Yet essential non-essentials like trips to Europe after undergrad will come entirely out of our own pockets now (obviously, this is the greatest consequence of an economy in profound recession. I'm surprised it wasn't addressed in any stimulus package).

 

The economic news is rather depressing, which is all the more reason to go to university.  Skills are a premium in a market where jobs are short. That's why so many people are continuing on, or returning to, graduate school in light of the downturn. Besides, Lipsey predicts in the same article above that the Canadian economy will boom in ten years. So go get your degrees, bum around in your twenties and when the fires of capitalism roar again, get back in the market.

From the editor: Our recent financial package offers some financial tools and information for students and parents

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