Students split on whether economic downturn affects spending habits

When she signed an agreement earlier this semester to sublet an apartment in Bloomington over the summer, freshman Tessa Wilhelm hoped she would have gotten a job by now to pay for her rent and other expenses.

But after applying for about 10 jobs with no luck, she decided to stop spending money entirely.

“I need to save money so I can continue actually going to school,” said Wilhelm, who pays for part of her tuition and all of her books. “Since I’m an out-of-state student, it’s difficult to afford.”

As the economy worsens, students like Wilhelm are trying to balance their expenses and bills with enjoying the college experience. Yet the extent to which students adjust their spending habits in a recession largely depends on their parents’ involvement and how much they have been personally impacted. 

Ellie Mafi-Kreft, a clinical assistant professor of business economics and public policy, said students like Wilhelm are more conscious of money because their parents pay for less of their tuition.

“It seems like a lot of students at IU are relying on financing that comes from their parents,” Mafi-Kreft said. “If their parents are uncertain about money, then they might become a little bit more aware.”

In addition, Mafi-Kreft said students’ perceptions of the economy depend on what spending they prioritize.

“Your income is responsive to type of goods you’re buying,” Mafi-Kreft said. “So, if your professor says, ‘I want you to buy this book,’ you’ll buy the book. But, on the other hand, when it comes to luxuries like spring break or eating at a restaurant, you’ll start thinking about spending.”

Junior Jessica Hansel said her awakening about finances came when her family lost a large amount of her college fund, which was in stocks.

“My college money was in the stock market,” Hansel said. “We lost $20,000 of it.”
Hansel now works at CVS so she can split the cost of her education with her parents and has cut back on shopping to save money.

Freshman Amanda Gruber also cut back on her shopping habit when she noticed she was running low on money last semester.

“In the past, when I went out shopping I’d buy everything I liked,” Gruber said. “Now, I put stuff back.”

Gruber’s parents have been paying tuition this year for her and her twin brother.
“It’s been taking a toll on them,” Gruber said. “They still have their jobs, luckily, but next year I’m going to help them out a little.”

Senior Bailey Wolfe never used to be a comparison shopper. But, when the economy started to get bad, he decided to sacrifice brand names to save a few dollars.
“I’ve started buying dollar stuff more, like ketchup for example,” Wolfe said. “I’ve learned to love generic.”

While Wolfe is taking small steps to save money, he said budget consciousness doesn’t impact his spending.

“I do what I want,” Wolfe said. “I don’t try to restrict myself just because other people spend less. If I want it, I’ll get it.”

After he graduates, Wolfe said he is going to have to make some budget-friendly spending cuts, especially since he will have to be responsible for insurance payments.
“A lot of my expenses like food, rent and bills aren’t going to go away once I graduate,” Wolfe said.

And even though students like Wolfe are now more aware of their finances, Margaret Taylor, who owns the Book Corner at 100 N. Walnut St., said she hasn’t seen any change in her sales.

“People want to read books,” Taylor said. “People need books, and I haven’t seen a change.”

Taylor said students keep buying books at her store because they enhance the college experience.

“I’ve been in the book business for 60 years, and I think students and everyone else still love books in the printed form,” Taylor said. “There are always going to be people who want to build a library, and that’s what I provide.”

Student-driven restaurants like Noodles & Company on Kirkwood Avenue might not be as affected as restaurants further away from student traffic. Noodles & Company spokesman Matt Wagner said overall, the restaurant hasn’t seen a change in its sales.

“As a restaurant, we’re doing well right now,” Wagner said. “We’re opening restaurants in college towns. ... That wouldn’t be happening if it wasn’t a good business move.”
But students responsible for their own spending money aren’t oblivious to the economy.

Before she started saving all of her money, Wilhelm said she used to see dance performances and order delivery food but has not done any of that recently.

She said she thinks many of her friends are less concerned about money because they are in-state students or are getting more financial help from their parents.

“Normally, I feel like the only one that’s saving money,” Wilhelm said. “It sometimes impedes on me socializing with my friends because they might go out to see a concert and I can’t pay the money to go.”