Jim Franco/RealSimple.com

Welcome to this week’s edition of our Tuesday Top 5, Econ4U’s weekly tips post to help you manage your money in five easy steps.

In a down economy and with so many people looking for work, job seekers should take every precaution to avoid giving employers a reason not to hire them. Make sure your application stands out in a good way by being aware of these pitfalls.

1. You don’t have a degree. The Bureau of Labor Statistics has some bad news for people who skipped out on college. According to data from July, the unemployment rate for people with only a high-school degree is 9.9 percent — nearly double that of those with bachelor’s degrees, of whom only 5 percent are unemployed. But it’s never too late to go back to school, so consider how a degree might boost your job search.
2. Your résumé is too long. You’re 25 years old and your résumé strains to fit onto two pages? Revisit every bullet point to see if it’s relevant to the position you want. If you’re including your volunteer activities and that summer you spent as a summer-camp instructor when you’re applying for a job at a law firm, it’s time to trim the fat.
3. You’re out of state. You’ve heard of buying local, but what about hiring local? Unless you boast a highly specialized set of skills or are seeking a top-of-the-food-chain position, your chances of being recruited by an out-of-state company are pretty slim. The applicant pool is so large, many companies are excluding job seekers who would require time and possibly expense reimbursement before they could come in for an interview. If you’re trying to move, consider setting up a local P.O. box that forwards to your home mail or use the address of a friend on your résumé so you don’t shortchange your application.
4. You’re unemployed. It may seem grossly unfair with 9.5 percent of the population out of work, but many employers are putting up “unemployed need not apply” signs. Some hirers report the belief that if you don’t have a job, you must have lost your last one due to performance issues — whether that’s true or not. So if you find yourself laid off, do whatever it takes to keep the income flowing so that joblessness won’t hurt you when the next opportunity comes knocking.
5. Your credit score is low. In many industries where you handle money — any job from cashier to accountant — you will be asked to submit to a credit check. And if the company doesn’t like what it sees, you won’t get the job, simple as that. The practice is perfectly legal, so when you give a potential employer permission to pull your credit history, make sure it’s in ship-shape.

If you’re unemployed at the moment, we don’t have to tell you that the situation out there is pretty grim. But you’re not alone: The Senate passed a bill last week extending unemployment benefits for people who find themselves jobless for up to 99 weeks. However, with an unemployment rate hovering around 9.5 percent, there simply are not as many jobs as people looking for work.

Whether you’re among the jobless ranks or simply want to take precautions, here are a few tips for ways to stay afloat in troubled waters.

1. Keep your credit score high. Now is not the time to limit your lending options with a bad credit score. Make every effort to pay your bills on time, and if you can’t, try to work with lenders to negotiate payment plans before the account goes to collections.
2. Sell your clutter. Sentimentality can be a financial thorn in your side if you hold on to your valuables longer than necessary. If you haven’t touched that bass guitar since college or your wedding dress is just going to yellow in the back of your closet, sell your stuff on Craigslist for instant cash.
3. Use free services to fine tune your job search. Even if you graduated from college years ago, check with your school’s career-counseling office to see if they offer free resume tweaking for alumni. And tap into the university job network, which will put you in touch with fellow alums.
4. Go back to school. If you’ve ever had an interest in continuing your education, now’s the time to pursue that advanced degree. Interest rates are at historic lows, and the new degree could give you an edge in the job market after you graduate. Just make sure you’re not taking on more debt for a degree that won’t ultimately increase your earning potential.
5. Keep in touch with your ex-employer. If you were laid off, there’s a chance that your old company could use your services on a contract basis. It may not offer benefits, but it’s still a paycheck. Even if they don’t have work for you, it’s always a good idea to keep up contact for future references.

As we’ve blogged before, this is a tough summer to be a teenager. There are very few job opportunities for unskilled workers this year, as evidenced by the 26.4 percent national unemployment rate among teens who would like to score a seasonal job. (And it’s even worse for minority youths.) But if you missed out this year, here are a few ideas to make yourself an attractive job applicant by the time next summer rolls around.

1. Be willing to do whatever it takes. Your first job is unlikely to be glamorous — that’s why they call it “paying your dues.” Sure, flipping burgers or changing diapers may not rank up there on your list of dream careers, but at least you’re getting a paycheck. And if you do it with a genuine smile on your face, you’ll reap the rewards with stellar references.
2. Act fast when opportunities arise. This week in Massachusetts, Gov. Deval Patrick pledged $9 million in taxpayer money to create 4,700 new jobs for teens across the state through the YouthWorks program. Check in your district to see if anything similar exists and take the initiative to get on a waiting list to secure a spot before the word gets out.
3. Get experience any way you can. Set yourself apart from the pack by having some background in the job you’re applying for. Even if it doesn’t come with a paycheck, volunteer work can be a great way to gain the skills and knowledge of your field of interest.
4. Keep a structured schedule. Don’t take unemployment as an excuse to be glued to the Wii all summer. Use your free time productively and you could collect money for doing chores or offering to run errands for your parents and neighbors. Plus you’ll feel more fulfilled than if you stay inside all day.
5. Persist. A dog groomer in Connecticut said she received 60 applications for 8 job openings this year — most of them teens and college students. While the odds are against you, be polite yet persistent and tailor your resume to demonstrate to a potential employer all the reasons why you should be among the select few to get a coveted space on the employee roster.

If you’re a new college graduate, it’s entirely possible you’ve never interviewed for a job in a formal office environment. (And even if you have a few internships under your belt, it never hurts to brush up on your skills.) Read on for a few of the biggest and most common mistakes.

1. Not dressing the part. If you’re on a job interview, you have to wear a suit. (With a tie if you’re a man, and heels if you’re a woman.) This isn’t an area where you want to take a lot of creative risks because there’s no payoff. Even if the office’s other worker bees are in business casual, remember, you’re not an employee yet.
2. Getting caught like a deer in the headlights. At the very least, do enough research that you can confidently answer the inevitable “why do you want to work here?” question. Knowing something about the open position will also show that you’re detail-oriented — and it’s better to show this strength than to insist to a potential employer that you have it.
3. Fidgeting, sweating, and otherwise looking nervous. Nerves are understandable if this is your first-ever interview — even seasoned pros will get the butterflies. But remember that you’re testing the company waters to see if this is a job you want to have, just as much as the company is determining if you’re a good fit. Find a way to boost your confidence to enter the conference room with your head held high.
4. Bashing your old boss. Don’t go there. Even if it’s the real reason you’re leaving your old job, badmouthing a past employer is the reddest of all flags — it spells “high-maintenance employee” like nothing else.
5. Neglecting the thank-you note. Cover all bases and send your interviewer a thank-you email (if you have it), then follow up with a handwritten note. Showing respect for the interviewer’s time never backfires, and it gives you one last opportunity to emphasize your interest in the position.

Student loans are intended to pay for your education, but I’ve known a few people who took liberties with exactly how they used that money. Here are some of the worst ways you can spend those checks:

1. Getting a degree in the arts or humanities. This is the sad truth: More than 23 percent of humanities students owe more than $30,000 in student loans, but hiring in that sector is down 40 percent since 2008. Make sure that you can find work that utilizes your degree, or else those student loans will be with you for a long, long time.
2. Paying your mortgage. Student loans include stipends to cover your living expenses, but renting is preferable to buying a house and using the student loan to pay your mortgage. If you plan on moving away from the area after school, houses tend to be poor short-term investments. Maintenance costs may pop up unexpectedly, leaving you short. And in general, it’s a bad idea to take on new debt to pay down old.
3. Funding your discretionary purchases. This one almost goes without saying, mostly because it’s illegal to misuse federal loans. Look into part-time work to buy clothes, dine out, or go on vacation. The reason is simple: Stafford loans carry an interest rate of up to 8.25 percent, and private loans can be even steeper. You’d be better off putting such purchases on a low-interest credit card or taking out a personal loan, rather than assuming more education debt than you need.
4. Paying off credit cards. Speaking of consumer debt, should you ever declare bankruptcy, credit-card debt would be forgiven but you’d on the hook for those student loans until death do you part. Don’t exchange unsecured debt for a loan that is with you for life.
5. Not learning how to budget. While you’re getting your degree, you’re also presented with a great opportunity to learn to budget your money on a fixed income. It is a valuable lesson that will serve you long after you leave the ivory tower.

To end on a happy note, congratulations to all the recent grads!

Unfortunately, summer 2010 is turning out to be a tough job market for teenagers and unskilled workers, but there are still ways for young people to spend the summer productively. Here are a few ideas of how to scale the ranks quickly and set yourself up for success in the future.

1. Get certified. If you’re looking for work as a camp counselor or lifeguard, you’ll stand out from the job-seeking crowd if you already have first aid certification from a reputable organization like the American Red Cross. Some jobs will provide this training, but already having it under your belt is a surefire way to set yourself apart.
2. Volunteer. Logging hours as a volunteer, while it doesn’t pay, gives you on-the-job experience and great references when you need them in the future. And with so many worthy charities looking for help, you’re unlikely to be turned down.
3. Tutor younger kids. Put your good grades to work over the summer. If you’re a math whiz or have a talent for writing, ask your teachers if they know of tutoring opportunities for students within your school.
4. Don’t slack off. Remember that experience is cumulative, so if you work hard at a minimum wage job, chances are you’ll be promoted beyond it fast.
5. Strike out on your own. Love animals? Advertise a pet-sitting or dog-walking service in your neighborhood. Do you enjoy being around kids? Spread the word among your parents’ friends that you’re available as a babysitter. But for safety’s sake, stick to working for people you know and trust.

Making the most of the summer is a great way to position yourself for a better job opportunity in the future.

Salary research organization PayScale surveyed alumni of the top 64 universities with men’s basketball teams participating in March Madness this year. A few notes about the data: Only graduates with 5 to 15 years of work experience were selected to give a portrait of mid-career salaries; unemployed and self-employed alumni were excluded. Median figures were used instead of averages (a wise decision, since many of the top sports heroes go on to make millions in the pros, which would skew the numbers).

Perhaps not surprisingly, Duke takes home the championship by a wide margin:

So how does your bracket stack up? See the full PayScale report here.

(via Economix)

This week, New York Times columnist Thomas Friedman wrote about what the country really needs instead of yet another economic stimulus package:

What the country needs most now is not more government stimulus, but more stimulation. We need to get millions of American kids, not just the geniuses, excited about innovation and entrepreneurship again. We need to make 2010 what Obama should have made 2009: the year of innovation, the year of making our pie bigger, the year of “Start-Up America.”

On that note, and in the spirit of getting the year started on the right foot, here are five ways to teach the next generation about the American Dream.

1. You’re never too young to learn. TIME magazine recently profiled Chicago’s Ariel Community Academy and its K-8 investing program. Each incoming kindergarten class is given dominion over an investment portfolio worth $20,000; by seventh grade, the young investors are allowed to pick what and when to buy and sell. Any profits at eighth grade graduation go toward a college scholarship fund that benefits the graduating class.
2. Even lemonade stands are teaching tools. Watch our video for just a few of the lessons this classic summertime activity provides young kids.
3. Encourage teens to start their own companies. The Network for Teaching Entrepreneurship’s flagship program is a contest at middle and high schools nationwide (mostly in low-income communities) that helps 24,000 participating students start their own businesses.
4. Avoid the “Freshmen Financial Fifteen.” College students are particularly at risk for not budgeting properly, signing up for expensive cell-phone plans, and abusing their credit cards. If they are aware of the responsible use of each, they are primed for a financially secure adulthood.
5. Finally, take the Econ4U Entrepreneurship Quiz. Even adults may be surprised at what they don’t know about starting a business.

College costs are in the news because of the College Board’s “Trends in College Pricing 2009” report, which  I would encourage you to read  for yourself. The general thrust captured by these newspapers is that published tuition and fees are up 6.5% for public universities and 4.4% for private ones from the previous school year.

How can this be? Have the colleges and universities not heard that our economy has been in a recession for at least the last year?

Indeed, our institutes of higher learning are acutely aware of the recession. In fact, the recession helps explain the increase in the cost of education.

Public universities receive state appropriations as part of their funding; those appropriations are taken from state tax dollars. The size of that funding tends to increase in a good economy, and decrease in a bad one. Even in lean years, though, universities can’t cut back spending too much, or else they risk harming those characteristics (research, faculty, etc) that contribute to their reputation. Thus, when student enrollment rises and state appropriations fall, public universities are forced to raise tuition and cut costs where possible.

Both public and private universities also depend on the generosity of their private donors, who fund their endowment. This money is especially important to more expensive private universities, who use endowments to fund expansion and keep college accessible for those students they choose to accept. Many endowments took huge hits during the financial crisis, so even very wealthy schools have cut back on spending. Harvard alone lost more than $10 billion, a hefty sum for any university.

Fortunately, it’s not all bad news. In the same way working professionals are concerned with their net pay –the amount of cash they’re taking home after taxes – potential students should take note of the net cost of college. Lost in the headlines about increasing tuition costs was this nugget: the price students pay for college–after financial aid is factored in–has fallen in the last five years, by about $1,100 at private universities and $400 at public ones. So while the sticker price on that great liberal arts college might be an unpalatable $26,300, the College Board estimates that financial aid and grants will reduce your net costs to a more reasonable $11,900.

Still – tuition plus the cost of living adds up to a hefty bill upon graduation. If you’re one of many Americans who paid for part or all of their education, then you’ve likely covered part of that bill with student loans. These loans are often referred to as “good” debt; you’re using them to finance an education, and interest rates and repayment terms (especially on federal loans) tend to be favorable.

But with median debt upon graduation nearing $20,000, this does mean you should approach college cautiously. Use the Bureau of Labor Statistic’s college outlook report to research the salary in the career you would like to pursue. Salary certainly doesn’t determine your job satisfaction, but it does give you an indication of your ability to pay back student loan debt.

The benefits of a college degree are undeniable – in general, college graduates have lower rates of unemployment, and earn more money over their career. Still, a college education is an investment like any other. Before making any expensive and long-term commitment, make sure you know what you’re going to do with it.

Jeremy Vohwinkle at Generation X Finance has compiled a list of 20 free online finance courses—a majority of which are offered by colleges around the country. Highlights from the list include 23 Money 101 lessons from CNNMoney.com and an online income tax course.

If you have some free time, these courses could prove to be valuable. Even if you think you have your finances in control, it’s worth a look. You may even learn a thing or two.