Colleges have taken a 23 percent hit in endowments, meaning the cutbacks are transferred on to students.But with smart borrowing and scholarship sleuthing, it’s still possible to defray some of the costs.

Watch David Noonan share some tips about smart borrowing and check out Newsweek/Kaplan’s college issue this week.

Grossman writes:

…When economists proclaim a recession over, they’re celebrating a technicality: they mean economic output has stopped contracting. And while that is good news, you might wait a while before adding Judy Garland’s rendition of “Happy Days Are Here Again” to your iPod. GDP growth alone can’t feed a family, or pay a mortgage.

The stock market has gained confidence and in June, seven of the 10 leading economic indicators were looking up. But with enormous national debt and thousands still jobless, it looks like we’re in for a long, slow recovery as Americans wonder– has the stimulus failed? What about the green construction and the infrastructure improvements that were going to restore our prosperity.

Grossman concludes:

To a large degree, the U.S. economy must now cope with an era of lower expectations. Road building isn’t a recipe for full employment, green technology won’t displace fossil fuels in this decade, the benefits of universal broadband may be overblown, and the dysfunctional health-care system won’t shift overnight from a headwind to a tailwind. The recession may be over, but there’s likely to be plenty of tough slogging ahead.

Photo by Kellen M. Henry

My friend Rob Story and I live in opposite-land. He’s tall and I’m short. He took serious classes for an engineering degree, while I… took wine tasting and played newspaper.

Consequently, he graduated with a master’s degree from Virginia Tech, got a job and moved to D.C. with his girlfriend Sheri. I, on the other hand, am moving to D.C. first, then graduating with my master’s degree and probably never finding a job.

I called him up for some free advice on life after school in the District of Columbia during the dog days of the financial crisis.

Have a listen:

Read the transcript below.

Rob: Hello?
Hank: Hello.
Rob: Why’s this number say “unknown?”
Hank: Because I’m calling from an unknown location in a bunker of journalism.
Rob: Really?
Hank: Are you ready to be famous on the Internet?
Rob: No. Wait a second. I’m already famous on the internet.
Hank: Why don’t you introduce yourself for the people of the Internet?
Rob: I’m Rob. I like to bike and I like to ski and occasionally I go to work.
Hank: Tell me about graduating and going out into the job market, as horrible as it was in May. You got a job pretty easily, it seemed like.
Rob: Yeah, I’m in a really small field. With ocean engineering and naval architecture, the workforce is in their 50s and 60s for the most part. So there’s this huge, top-heavy workforce of really smart people that didn’t really transfer their knowledge to anybody. So, yeah, it wasn’t too bad for me. I was just kind of pigeonholed as to where I could work. Even if it’s a private job, it’s government related, so you’re stuck in D.C.
Hank: Did the people you graduated with, did they find themselves in pretty much the same situation or were they scrambling a little bit more?
Rob: I was pretty much the only person I knew, of my group of friends, coming out. The undergrads that I knew that were coming out, they were finding jobs pretty easily, so I don’t think they had any issues. Like I said, if you’re willing to move to somewhere like D.C. or Houston or Norfolk, then it’s really not a problem finding a job.
Hank:Is that at all a function of the recession or is that pretty much just the field?
Rob: Well, actually so, I almost got a job in Boulder [Colorado] and I had an interview in Seattle [Washington] and in both cases, both companies had hiring freezes. They basically said, ‘Alright, we don’t know when our contracts are coming in. Basically, our re-contracting happens in the summer, so it’s not just that we can’t afford to hire you, we don’t want to hire you and then not have anything for you to do, literally sitting there twiddling your thumbs because we have no work for you to do.’ So, I was directly affected in that way.
Hank: So, you just made a big move to D.C. from Roanoke, Va. Has that impacted your life in any significant way as far as your finances and what you’re paying attention to?
Rob: You know, I was operating on a graduate student budget in Roanoke, so I didn’t really have that much money down there. And coming up here, yeah, it’s really expensive to live. Our rent has tripled? Yeah, I think we’ve tripled our rent. But as far as costs go, I mean, we spend a lot of money on food because food is more expensive and we spend a lot of money to live but I’m also getting paid a lot more, so it doesn’t feel like it’s been a really awful change.
Hank: Now, you’re into some pretty expensive, gear heavy sports as well. How do you balance that with your necessities and how does that play into your planning for finances?
Rob: Well, the travel part is the hard part. I basically put myself in debt buying all sorts of fun things and now I’m paying some of that off, but the issue really is saving up money to travel. You’ve kind of got to keep your eye on the goal because if you don’t continue saving, if you keep spending and spending and spending, then you realize, oh man, I’ve had this goal, but I’m not getting any closer to it. So, we’re trying to put some money away, so hopefully we can move out west and maybe I can spend a winter skiing or some such thing.
Hank: Do you think that’s a pitfall that a lot of young people make, kind of working paycheck to paycheck and not really thinking about the long term?
Rob: Not just young people. There are a lot of people living paycheck to paycheck these days because you get older and you’re like, oh man, I’m going to save money, but as you get older, you incur more costs. You have kids, you have houses, you have cars. We’re doing pretty well. We’re trying to stay budgeted and I’m trying not to buy a lot of random gear-y crap that I probably don’t need. And really, Sheri [his girlfriend] is the big financial person around here. She keeps a lot of the budget.
Hank: Do you guys have a formal budget or do you just kind of try to eyeball things?
Rob: No, Sheri just keeps a big spreadsheet and she actually keeps a formal budget month to month of what’s going out, what’s coming in and then how much. We haven’t split it down into specific costs. We just kind of keep a running tally of how much “extra” money we have. Really, we’re paying… I’m really dumping money into paying off my car and that sort of thing, and eventually, student loans are coming up here in November, so I’m really dumping money into any debt that I have to try to get it paid off within a year or two so that when I’m ready to get out of D.C., I don’t have anything looming over my head.
The issue is, if you just pay minimum credit card payments, I forget what the numbers are, but if you pay minimum payments, it’ll take you years and years to get it paid off. So, if you ever realistically want to get that kind of thing paid off, your really just have to start dumping money into those things. Finance charges will kill you and you don’t realize it because it’s just tacking on a little bit month by month, but at the end of the year you’re like, holy crap. I’ve lost so much money, you know, just straight to the bank. Right out of my pocket.
Hank: Any other thoughts about that transition from student-dom to real-world life? That’s what I’m grappling with.
Rob: Well, I’ve only been out for two months. And it helps that I really like my job. I really like what I do and I really like my boss and the people I work with, so that’s making a huge difference. You know, as a graduate student, it was: sit down and work all day on research, and now it’s sit down and work all day on a different thing. Except now I get a sweet office. Oh, and free coffee. I have a company that provides both coffee and office supplies. That’s a pretty new thing, so, that’s been the biggest thing. Coffee and office supplies. Let your readers know.
Hank: Coffee and office supplies. If you want to be an ocean engineer, you will have coffee and office supplies in Washington D.C. That sounds worth it.
Rob: Yup, indeed.

Creative Commons photo by Flickr user (nutmeg)

Hard up for cash while you’re waiting for that Google AdSence check to come? No luck getting into a medical study for topical ringworm medication?

There might be more alternatives than you think.

Wisebread has a list of Six Weird Things People Sell for Cash and weird is right.

Unfortunately, the scarcity principle comes into play here too. I would gladly sell all of my chicken poop or false teeth, if I had any to begin with.

I also don’t have any (creepy) Princess Diana dolls or simple machines I’m willing to put on the block. But as long as the “world’s oldest profession” is in a slump, why not try one of the world’s newest and dip a toe into the murky online classified pool of  Craigslist?

The breadth and affordability of stuff I can find on there  never ceases to amaze me. I’ve yet to sell anything of my own, but I got a solid deal on a bicycle a couple of months ago and I’m in the process of using it to search for an affordable sublet in D.C.

Before the Internet, how easily could you have found someone with whom you could barter an area rug for bar-tending services, or a someone to rent your collection of sombreros?

Like any good market, it’s bringing the buyers and sellers together to discover prices. And that means we all get what we want. Plus cash for our sombreros.

By Kellen M. Henry

If you find grocery shopping tedious with a car and a job, I challenge you to try it with a hand cart and student loan money guilt. By the time you throw in tax, the challenges of eating healthy and half a dozen wrinkled coupons, my bi-weekly shopping trip becomes an all-afternoon affair.

Plus, I’m trying something new– really eating healthfully on a budget. I just finished Mark Bittman’s book Food Matters, after reading his Bitten column in the New York Times for ages. I like how his cooking is chic without being snobby and simple without being, well… Food Network.

The book’s premise, culled in part from Michael Pollan, is that the American nutritional ethos is far too costly– we’ve been paying with the environment, with our health and with our wallets, too.

It’s pretty intuitive. He suggest we cut half of the meat and processed food from our diets, replacing them with fruits and vegetable, which he calls sane or “whole” foods.

No, not necessarily those Whole Foods. This is one potentially money-saving part I like. While it might be ideal that we be super-locavore-organic-obsessed shoppers, the greater message is Broccoli vs. McDonalds, not Regular Broccoli vs. Holistic Broccoli that has been read bedtime stories.

With the growth of health food grocery stores, it seems easy for the most casual shopper to make healthful grocery decisions. But if you’re paying higher prices for what you think is better quality, you owe it to yourself not to be fooled.

Take a look at the labels. Can you trust the claims that manufacturer’s are making about their products? The healthy foods industry ain’t no quaint farmers market anymore. As of 2001, sales of organic foods and beverages exceeded $9 billion, according to the USDA. Check for a USDA label certifying whether or not something is really as organic as it claims to be.

It’s the inside that counts. It’s just cheaper to buy a head of lettuce or a bundle of carrots than a big pre-packaged salad mix. Even if you’re not a chef extraordinaire, you can certainly wash and cut veggies. Plus, think of all the plastic that would be saved if we didn’t buy our pre-washed spinach in big plastic boxes. You’re just going to take it out and wash it at home, right? Right.

Go in with a plan. We’ve all heard the adage about not going grocery shopping on an empty stomach, but don’t go with an empty head, either. Wandering the grocery store picking up colorful packages will probably mean a higher bill than if you make careful lists, buy staple foods and plan meals. There may be some things you like from fancier specialty stores, but it’s probably cheeper to get the normal things at the big chain or the bodega. Price compare between chain stores, too. Sometimes things run different prices between Jewel-Osco and Dominick’s, here.

Be realistic. Sometimes it pays to buy in bulk, but only if you’re buying things that are fairly non-perishable. And know thyself. I love artichokes, but they’re a lot of work and how many times do they end up going bad in my crisper before they make it to my face? If you can work in extra trips, stock up on things that keep during bigger shopping runs and buy those fruits and veggies in smaller amounts for freshness.

Of course, there are always trade-offs. You can probably buy six pallets of Ramen noodles for one grocery cart of healthier fare, if you don’t care about taste or your blood pressure shooting up faster than the grocery bill at Dean & Deluca.

Happy shopping! And remember to bring your own bag…

Though some young men are still spending on non-essentials, many are suffering as  historically male jobs like construction taking hard hits in what we’ve nicknamed our y-chromosome woes: the “mancession.”

Are the gentlemen among us taking the hardest hit? For June, it certainly looked that way. The latest unemployment statistics show the unemployment rate for men was at 10.0 while the unemployment rate for women was at 7.6 for June.

But just because men seem to be disproportionately affected, “that doesn’t mean these are boom times for women,” according to an article in Newsweek by Nancy Cook. While they’re losing less jobs, women only make about 78 cents per dollar and are more likely to have jobs without benefits or retirement savings, according to the article.

Now, who did you say was missing out?

Flickr Creative Commons via s11ver

The Consumer Price Index for June was released today, telling us that some things we bought last month were more expensive than they used to be. I blogged about what the numbers mean for us in Chicago today on Medill Money Mavens.

The CPI considers the average price for a basket of goods and services bought by households across the country. Inside the hypothetical basket are prices we care about, like what it costs to pay rent, fill up our gas tanks and buy beer on Saturday night.

The CPI always reminds me of a cartoon I saw on Rocky and Bullwinkle as a kid, where the Big Bad Wolf steals the basket that Little Red Riding Hood is taking to her grandmother. Unfortunately for him, it’s a volatile basket that explodes violently every time he says the words “Basket full of… BOOM… goodies.”

One of the “goodies” we get with the CPI is an idea of how much inflation is growing on the dollar. We can compare today’s basket with the price of a basket a year ago to tell if our money buys more or less than it did last June. Last month, the price of gasoline grew more significantly than other sectors.

When the Federal Reserve looks at the CPI to see if  inflation is growing, it removes the volatile stuff from the basket,  like energy and food prices. They fluctuate too much, just like gasoline did in June. If the Fed thinks inflation is getting higher than about 2 percent, they might raise the target interest rates to push it down.

The small rise in prices in June doesn’t necessarily mean inflation is taking off and economists don’t see the Fed raising interest rates any time soon, but it could mean that prices– and the economy– are beginning to stabilize.

The Credit Crisis Visualized by Jonathan Jarvis is a little old, but it’s one of cleverest and most easy to understand explanations of the financial crisis I’ve seen. Take a peek at part deux as well! Linked from YouTube.

There’s no consensus on what this means for recovery, but most economists agree the creep of unemployment toward 10 percent doesn’t mean it’s going to happen quickly. The more precarious their job situation or the longer they’re unemployed, the more people will cut back on spending. Even if you have a job in a thriving industry, the last year of economic thin ice is probably enough to make you think twice about splurging on something you don’t need.

It’s like an awkward first date. Companies aren’t going to risk a stinging back-hand by re-hiring people and churning out products before there is a steady market for their products. Companies are going to let consumers make the first move. But consumers are so spooked from bad experiences that they’ve lost their nerve. They’ve got a lot to lose and they’ve lost a lot already.

Economists are watching for consumer confidence and spending to rebound as an indication that the economy is starting to turn around.

Until then, it looks like we’re all going home alone.

Here’s Newsweek’s take from last week

Creative Commons photo by LotusHead, www.sxc.hu/profile/LotusHead

Think of this blog as a desert fork for understanding the economy. It’s a simple tool for a demographic that wants easy-to-swallow money advice that goes beyond the main course. By using a three-tined approach to dole out news, personal finance advice and real-life spending scenarios for people taking their first foray into the working world, I’ll present our complicated financial system in a way that tempts the solvent sweet-tooth.