Financial planners say there are steps young adults can take to minimize the disadvantages of starting out in the heart of a recession.

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Young people who entered the job market in the depths of the recession have likely heard the grim predictions about years of lower earnings and never catching up.

Some have made the gamble to go to grad school, incurring more student-loan debt.

Others have more questions than answers about what they should do.

Financial planners say there are ways to minimize the long-term impact of a recession-challenged career start, and many say it starts with managing students’ loans wisely. They also emphasize the importance of marketable skills.

And some note at least one bright spot: that millennials may be developing a frugal new mindset that could help them in the end.

Nationally, America’s student-loan debt — now more than $1 trillion — already exceeds its credit-card debt, with half of student borrowers owing more than $12,800, and 3 percent owing more than $100,000, according to one study.

But even relatively small loans can take a long time to pay off when a graduate is out of work or earning little.

Planners urge loan holders to make their minimum payments on time to avoid penalties, and to try to pay off the highest-interest loans first.

Recent college graduates should first stay current on their loans, then build up an emergency fund, and then set aside money for retirement, said Rick Bryan, a financial planner at Conlon Dart Wealth Management in Seattle and president of the Financial Planning Association of Puget Sound.

Other planners stress that young graduates — even those with student loans — should do everything they can to put money into a retirement plan if their employer matches their contribution.

“That’s free money,” said Kathy Henningsen, a financial planner at Retirement Asset Management in Bellevue.

Kim Miller, a financial planner at Sweetwater Investments in Redmond, said if graduates plan to work for a company long enough to become vested in their employer’s retirement plan, then it’s worth putting extra money in.

But if the goal is to pay off the loans as soon as possible, then focus on paying down the debt and delay contributions to a retirement plan.

“Having no debts allows you more choices,” Miller said.

Making yourself marketable

Developing skills that are in demand is key to reducing the damage a recession can inflict on paychecks.

In a study of college graduates from 1979 to 1989, Yale economist Lisa Kahn found that for every percentage-point the unemployment rate rose, those who graduated during a recession earned between 6 and 7 percent less in their first year out than peers who graduated in better times.

By the 12th year out of college, recession-era graduates still earned 4 to 5 percent less.

“Taken as a whole, the results suggest that the labor-market consequences of graduating from college in a bad economy are large, negative and persistent,” according to her report.

Other research shows that college students’ choice of a major can affect both their success in staying employed and in diminishing the effect of a recession on their long-term earnings.

That doesn’t mean everyone should become a computer programmer. But planners do urge college or grad students to do a cost-benefit analysis and get some early exposure to the industry they are interested in.

Seeing frugality as a good thing

Some planners also refer back to the Great Depression, when a generation learned to save money and invest it prudently, and many became wealthy later in life.

Similar tough times now could cause young people “to make really good financial decisions, where maybe their parents didn’t,” said Michael Boone, a Bellevue financial planner.

Many millennials already know that they can’t count on having Social Security when they retire and that their parents may not have saved enough for their own retirements, let alone to pass down an inheritance.

“I think it might even be cool to be frugal and making headway that way,” Boone said. “You’re going to see that ‘living large’ thing start to be looked down on.”

Boone urges young people to begin saving even small amounts.

“Little bits of money and a lot of time can make a big difference,” he said. “Compound interest is pretty incredible.”

Sanjay Bhatt: 206-464-3103 or