Millennials catch a lot of flak for having a supposed easy existence. But times are tough economically and while all of our lives have certainly become easier with the convenience of modern comforts and amenities, making a living isn’t as simple as it used to be. It’s no surprise that more and more millennials are using title loans and other short-term lending options to bridge the payday gap. But what is driving this shift, and how can we avoid financial pitfalls? Here are the top 4 reasons millennials are turning to title loans to survive in today’s economy, and how you can avoid some common pitfalls and become a budget buff in no time.
While housing, college tuition and general living expenses have consistently risen with or beyond inflation, most salaries have remained stagnant for nearly a decade. In today’s economy, a bachelor’s degree is the new high school diploma and you need experience to get a job. Students at the end of their scholastic careers are finding it harder and harder to break into their industry and rely on more accessible lower-paying jobs. Whether you’re a freshman, going back to school for a few credits, or done with school all together, making a budget that works for you is the best way to avoid getting blindsided by expenses.
When every dollar has a job, you’re putting your finances to work for you, and not the other way around. If you’re a student, try to treat your education like a full-time job and master your area of expertise, so you can qualify for merit-based awards, scholarships and grants. Never underestimate the value of internship opportunities and forge networks and professional relationships with your colleagues and professors. Internships are a great way to hit the ground running within your field and give you early experience that could make all the difference to future employers, or even offer the promise of a job in your field when you graduate.
We all need to eat and sleep and that means you need a roof over your head. If you aren’t married or living the dorm life, you may already be rooming with someone to make ends meet. But living a lifestyle beyond your financial means will eventually lead to credit card debt, late payments, overdraft fees and damage to your credit score. This can set you back farther in your financial goals and make it harder to obtain the credit you need for a car or home down the line. The 50-20-30 rule states that you should set aside half of your income to your essentials, and split up the remaining half for savings and recreation. This is a great framework for your budding budget and can help you identify problem areas with spending habits to resolve them. Maybe spending a little extra at the grocery store can save you money in last minute trips to Burger King for a late-night snack, which will improve your diet while you improve your finances. You don’t have to let your finances rule your life. Take charge, and build a budget that works for you.
With costs increasing across the board as incomes remain sluggish, many young people find themselves leaving home to strike out on their own only to return when their expenses finally catch up with them. That means completing their education to land a well-paying job suddenly takes a back-seat to survival. This “temporary” delay in completing their degree often becomes permanent, which sets them back in life a lot farther than just a few thousand dollars in student loan debt. Young people who are lucky enough to have a home to come back to are still out all that money spent trying to stay afloat on their own, and those costs add up over time. When your credit is already hurting, qualifying for traditional loans may be too far from reach, and obtaining a title loan is a faster and easier way to get you where you want to go. Budgeting early can help you avoid short-term loans and falling behind on your life plan.
It’s like the old adage says - education and success don’t come cheap, but where do you get the funds to begin with? Whether it takes you a decade of going to school part-time to get your degree or you tough it out and finish your schooling in four years, the long-term benefits far outweigh the short-term sacrifice and expense. If you don’t already have some savings stored away, you owe it to yourself to start today. Budgeting wisely out of the gate and starting a savings account as soon as possible is a smart and easy way to put a barrier of protection between you and unforeseen expenses and cash emergencies. Followers of the 50-20-30 rule may want to rethink recreation expenses and dedicate more of their budget toward their savings. Give yourself personal goals and deadlines to meet. If going back to school is a major goal for you, do your homework and start saving now, so when it’s time, you’ll be financially prepared for the undertaking. You have nothing to lose and everything to gain.