PETE: You’re listening to How Not to Move Back in With Your Parents here on the IU MoneySmarts Radio Network. I’m Pete the Planner joined by Alex, as always. Hello.
PETE: Phil Schuman Director of Financial Literacy at Indiana University joins us on this episode. Phil hello.
PETE: All right, so we’re recording the podcasts and we’re working on this stuff for you guys, the listeners, to make sure you know and understand what’s going on and Alex says to us why don’t we talk about what happens if you don’t get a job. Cuz you go to school with the thought, I’m gonna get this education, I’m gonna go out, and I’m gonna get a job. But the reality is, you might not. What do you do? So this episode of How Not to Move Back in with your Parents, we’re gonna talk about how possibly, you might be moving back in With Your parents.
ALEX: It’s a deep one.
PETE: It is.
ALEX: It is a toughie.
PETE: Yeah, all right.
ALEX: It hurts.
PETE: So, obviously as graduation approaches, you’re gonna wanna start looking for jobs. And upon turning your cap and gown back in to get your deposit back is not the time to start looking for jobs. In fact, many job offers have already been handed out to incoming seniors so you get on it now. But if you get there, you’re no longer a college student and you officially are unemployed. What do you do? Phil, you ever been in a situation when you wanted a job? And by the way, the job wasn’t there.
PHIL: Yeah, I’ve had an instance where a department of mine has closed, and I got laid off. My entire organization that I was with closed down. Fortunately I think IU is a little more stable than that.
PETE: They might be.
PHIL: But right after I got my MBA I was unemployed for six months or so.
PETE: All right, so let’s deal with the non-financial ramifications here because here’s what I know. That’s gotta mess your head up a little bit.
PHIL: It was not a good time for either me or my wife because I was just, basically depressed at that point because I wasn’t contributing anything to our family.
PETE: So that’s a very real concern, and we’re gonna have financial concerns which we’re gonna talk about, in just moments, But you have to understand the mental aspects of being without a job that you covet and that you need. Phil, you were in a situation where you had another income in the house cuz you were married.
PETE: So that certainly helps.
PHIL: Yes, it was part time though. Granted as a part time, like in a law firm so the pay wasn’t horrible but at the same time my wife was still finishing up law school at that point.
PETE: I think for a lot of people the natural reaction are two things that I want them to avoid. Well I might as well just go back to school and take on more debt, go to grad school, avoid that, avoid that. This is not against education, obviously all three of us very much value education, very much. But I will say the default, solving a financial problem by going tens of thousands of dollars deeper into debt is not an idea that you want to employ.
ALEX: Yep. Plain and simple, yeah, there’s no reason to spend tens of thousands of more dollars that you don’t have because you don’t have a job.
PETE: Right, the problem is you don’t have money and so then you solve it by having less money.
ALEX: Yeah, it’s just, it well, I could get another job after that a better job with graduate school. It’s like, it’s not worth putting yourself that far in debt beyond what you already will be with student loans. Already before you have any work experience.
PETE: The other reaction that people have is well, I’m gonna then now defer off and file for hardship against my student loans as long as humanly possible, because of this small period of my life, relatively speaking. When things are not going so well. Never defer student loans longer than you have to because it will only kick you in the teeth on the back end. Phil now we have to get some practical financial advice of what do you do? The number one problem with not having a job is a lack of income, okay. The lack of income goes immediately to your expenses, and the number one expense people often have is housing. So the first thing you have to deal with is where in the world are you gonna live with no income? Phil did you ever move back in with mom and dad?
PHIL: Technically yes, although it was actually when I did have a job just because I was commuting so much back to my hometown. So it just made sense for me to bunk up with them for a few nights a week, but not when I was unemployed.
PETE: Now Alex you could potentially work in a city in which you grew up in, more or less, right.
PETE: Thinking ahead, you’re graduating in May of 15, right?
PETE: Is the default to move back in and figure stuff out? You’re gonna have a job, you know you’re gonna have a job, but is the default to move back and figure it out?
ALEX: No, for me but then again, having a job, for me is no, move out, get an apartment, and maybe not be in Indy where I grew up. But if I am in Indy still to kind of be on out on my own, and figure it out that way. But it’s funny how this all came full circle, cuz that’s the name of our podcast. But at the same time it might be a decision that you have to make if you don’t have a job.
PETE: And if you do move back in with your parents, there have to be rules. I hate talking about this but we have to, right?
PHIL: If my kid came back and lived with me, I think I would just have some sort of rent or something has to be contributed toward the household. Which would still mean that even if you’re not employed in terms of a full time status or something like that, you should still be out there if you find a part time job something like that. You should still be doing what you can to build on your resume anything like that, so you’re improving yourself.
PETE: Yeah, again, this is a complete opinion based question. Alex, if you did not have a job, do you, there’s no right or wrong answer although there probably is. Do you think you would be the person that would get some sort of either retail or food service or some part time in nature job that wouldn’t require a degree necessarily. But would allow you to have some income while you’re looking for that full time employment, or do you think that, that would somehow hurt your chances to get that full time employment?
ALEX: For me I think it depends on the amount of time. So if I am unemployed but I have nothing in the pipeline, I don’t have any interviews coming up, any connections with the companies I can try and take advantage of then 100% I’m getting a job to try and keep some income. But if I get unemployed and I already have interviews ready, I’m gonna, it might be just a couple weeks, then I might consider not. Because one, they wouldn’t wanna hire you on if you’re gonna leave immediately. But two you’re gonna have that option of it’s not too long, I have it in the system, it’s a little less risky, you could say. But if you don’t have a lot in the pipeline and you’re not feeling good about it, then you should get a job to supplement your income.
PHIL: I took a 20 hour part-time job at a golf course after I got my MBA since I was unemployed for a couple of reasons. Number one it, kinda restored my sanity at the point.
PHIL: Cuz it got me out of the house 20 hours a week.
PHIL: And I also thought about it from a standpoint of since I have my MBA, this might be a good place for me to network with people that might offer me a potential job. So that actually helped out a lot, and not to mention I got free golf out of it.
PETE: I know what I’m about to say can’t sound any other way than slightly condescending, but I don’t care, I’m gonna say it anyway. Showing a little hustle in that situation is kind of important. You know what I mean? If the circumstances or preparations or otherwise lead you to a point in which you find yourself unemployed upon graduation, the idea of getting a 20 hour part-time job to have a strategy, to network. And to have a shelf life on you staying with your parents say, I’m moving out by November 3rd or whenever. It’s really gonna help, the nasty reality, guys, and we’ve all seen it, some of us more than others, is when that temporary stay at mom and dad’s becomes my kids lived with me now until he’s 32.
ALEX: Yeah, living in the basement, it’s not good. You can’t turn into that.
PETE: Yeah, look, again, circumstance are circumstances sometimes things happen. That is why you need to take career aspiration so seriously. So soon within your senior year, and that’s why internships are so important too, because they can lead to opportunities.
ALEX: That’s another option too, I have a lot of friends actually, who are in the grade above me who just graduated, who haven’t found full time employment though. They might have a past internship, they can come back and intern the next summer and then try and transition to a full time opportunity there or to give them time to try and find another job. So don’t be afraid to find internships as well as a graduate.
PETE: Yeah, we had, a lot of times they’re called external internships, I don’t know how that works. Externalships? A graduate internship, and they’re very common more and more so going forward. Anything else, Phil, you wanted to add on this?
PHIL: The only thing I would add to Alex’s internships also volunteering. Finding some sort of community organization, get a part of that. Again, just while you’re not working, do what you can to still build your resume so it looks like you’re actively improving yourself.
PETE: For more tips like these, go to moneysmarts.iu.edu. You’ve been listening to How Not to Move Back in With Your Parents here on the IU MoneySmarts Radio Network.