Anya Kamenetz Generation Debt

Congratulations, college class of 2008! You've earned your diplomas. Now it's time to get smart about the real world.

Current projections say the job outlook for the class of 2008 isn't bad but it's not great either -- there is an increase in hiring compared to last year, but it's half of what was projected in the fall, and salary growth is mixed as well.

The bad news: Research shows graduating into a recession has the potential to negatively affect your earnings in the long term.

The good news: Surviving and thriving in an economic downturn boils down to managing your expectations and your finances wisely, which is a lesson with a lifetime's worth of value. Here are some areas to concentrate on.

The "New York Times" did a piece recently on finding your first New York City apartment.

One of the men they profiled is a consultant who chooses to pay more than half of his after-tax income for an apartment in Manhattan. Despite the fact that his income (combined with a roommate's) satisfies the landlord, he is not showing good financial sense. You shouldn't spend more than 30 percent of your income on rent. If you need to split the rent eight ways, then do it. When you're young, living with lots of roommates can be a rite of passage, not to mention a fun way to get to know people and have a home base in a big city.

Or try starting out in a not-so-big city. The most affordable rents, not surprisingly, are in states such as Kansas, Oklahoma, and Kentucky.

Young people are the largest and fastest-growing group in the country without health insurance. That must be why I've been invited to several benefit parties for twenty- and thirtysomethings who have unexpected medical expenses that they can't afford to pay for.

Doctor's bills are bad for your wealth as well as your health -- they're a leading cause of bankruptcy and credit card debt.

So if you don't have health insurance through your job -- or if you're still looking for a job -- here are a few options:

- In 30 states, you may be eligible for coverage under your parents' plan as part of a family rate, up to your mid 20s (in New Jersey, the limit is age 30). Find out more here.

- You may also be eligible for low-cost coverage under a state or local plan for low-income adults, such as Healthy New York or Healthy San Francisco. Check your state's insurance department for details.

- Consider a so-called catastrophic or major medical plan; these have the lowest monthly premiums and high deductibles, but they will pay off if the worst occurs.  

Got student loans and credit card debt to pay off? One tactic that's worked for a lot of readers is to start a debt freedom blog. Use an online calculator to figure out a date by which you want to be debt free, and a realistic monthly sum to save -- say, $50 -- that will get you there. Then, post about your progress as a way of keeping yourself to that promise.

See this personal finance blog aggregator for lots of great suggestions and models for your blog.

Personal finance sites marketed to GenDebt are growing every day, and anything that starts the saving habit is a good idea.

At Billeo.com, you can build your credit score by simply paying bills. SmartyPig.com, a startup, offers retail rewards and a relatively high interest rate for saving online, with a fun, social format; Wachovia's Way2Save and the site whatareyousavingfor.com, sponsored by a credit union in North Carolina, offer similar savings rewards.

Education and health services top the list of employment sectors with the biggest and fastest growth, and with significant public spending in these areas, they'll still be hiring, even in a shrinking economy.

"Green jobs" are another broad area where I see big opportunities. The UN reported that the environmental industry created 5.3 million jobs in 2005.

Green jobs range widely -- from scientists developing renewable energy technologies, to engineers, lawyers, green architects and designers, and even organic farmers and gardeners.

Recycling, waste management, and remediation are special growth areas, along with renewable energy. Senator Barack Obama(D-IL), for one, has proposed $150 billion in federal investments to create even more green jobs.

You can find dedicated listings of green jobs at sites such as sustainablebusiness.com, greenjobs.com, and treehugger.com. 

An interesting nuance to the research on recession and income:  One study found that "graduating in a recession leads workers to start at smaller and lower-paying firms, and they catch up by switching jobs more frequently than those who graduate in better times."

At first, the study by the National Bureau of Economic Research
found, recession grads can take a hit in earnings of up to 9 percent compared to boom-time graduates, but those losses are made up over time by trading up more often. So while you're working hard at making yourself indispensable at your first job, don't get too comfortable. Keep an eye out for new companies, positions, and industries that might lead you toward your passion.

One last point: In the past, recessions have led to bumps in grad school enrollment because staying in school looks preferable to jumping into a dicey job market. I would urge any new grads to get a couple of years of work experience under their belts and research their field thoroughly before rushing back to school and taking on more student loans.

But whatever you do, don't stop learning new skills, developing your particular talents, and keeping an open mind about opportunities. That's what will make you indispensable -- no matter how the economy is doing.

Next week I'll answer finance questions from real new grads.