By Andrew Johnson
GreenPath Communications Manager

A recent joint study from PwC and George Washington University found that 42 percent of college-educated millennials (ages 23-35) have tapped short-term financing from pawn shops, payday lenders, tax refund advances or rent-to-own purchases within in the last five years.

That’s concerning.  In a nutshell, the study says millennials owe a lot, but know too little. 

As a demographic group, millennials have low credit scores, high delinquency rates and growing student debt.  

The study also found that nearly 50 percent of millennials don’t believe they could come up with $2,000, if an unexpected need arose within the next month.  

So, what is the first step, when thinking about financing a purchase?

First things first! Take a step back, and take an honest look at your fundraising options. Keep in mind that typical interest on a payday loan is 391 to 521 percent, and the average payday loan borrower takes out nine loans per year. Feel that gnawing in the pit of your stomach? That could be a sign that you shouldn't take drastic measures, like using a payday lender, to finance a purchase.  

Learn it! Reach out to a non-profit, credit counseling organization. They offer free credit counseling, can help you better understand your expenses, help you review your credit report and help you put together a personal budget.

Here are some longer-term alternatives.

School girl carrying a bookPlan it! Using automated savings, start funneling a certain amount of money each paycheck, into a separate savings account. If you simply say you’ll save more and leave it in a joint checking or savings account, you can’t see that money grow. Watching your account grow will provide incentive to save even more for your needs down the road.

Raise it! Are you receiving a raise or bonus in the New Year? Work some of that increase into your separate savings account, and live the same way you did in 2015.

But, what if you need the money now?

Ask a family member. Asking family for money can be hard, but a family loan will save you money in the long run.  Agree upon payback terms in writing.

Ask your financial institution. Reaching out to your credit union or bank could be a good step in securing a low-interest, short-term loan.

eBay and Craigslist can be your friend! If you have a lot of stuff laying around you no longer use, sell it!Student walking on campus

Scrap it! Copper tubing, aluminum and steel can be sold to a scrap yard. Or how about that old brass chandelier in the attic gathering dust? If can be sold, too!

With a little planning and foresight, you can accomplish your goals, while saving money at the same time.