Too many of the generation known as millennials — those born from the mid-1980s until the late 1990s — are financially troubled, raiding retirements savings and resorting to payday loans services, a recent study shows.
More than 80 percent of college-educated millennials said they have at least one long-term debt in a survey by national audit firm PricewaterhouseCoopers done with the help of the George Washington University Global Financial Literacy Excellence Center.
Nearly a third are overdrawn on their checking accounts, the study says. And more than 40 percent are using payday loans, auto title loans and other “alternative financial services” just to get by.
“They have been brought up to where they have easier access to various different ways to get money, and to lose money, than any other generation has,” said Shannon Schuyler, PwC chief purpose officer and corporate responsibility leader. “They have a lot of opportunities but also a lot of different ways to get themselves into trouble.”
Millennials are hungry for experiences, eager to dine out and travel when they can. Their average time staying at a single job is just 18 months, Schuyler said.
“They’re in the standpoint of live-for-now versus live-for-the future,” she said.
Matt DeNuzzo, 27, co-director of the Dayton Mobile Market and a graduate of Vanderbilt University’s Owen Graduate School of Management, agreed that some young people are likely living with the consequences of poor financial choices.
“We probably don’t balance checkbooks as well as we should,” he said, quickly adding: “But no one uses checks any more.”
Student loans are a legitimate issue. But DeNuzzo said college is increasingly expected for an array of careers and has become the “new high school.”
“That’s why we have so much debt,” he said.
Not all millennials are struggling. Several area millennials — including a former investment banker and a University of Dayton-educated entrepreneur who owns three local businesses — said it’s up to the individual and his or her choices.
Briana Snyder, 27, owns the downtown Dayton boutique and party shop, Confetti. She also is a wedding photographer, and she’s working with Max Spang, also 27, to launch a corporate photography and video business.
Snyder said she took a single finance class in high school. But she graduated from the University of Dayton in three years and hasn’t used a credit card in her entire life.
“Anything I know I had to figure out,” Snyder said.
A friend and fellow millennial, Jenna Burnette, 29, says she steers clear of the credit card trap. “My brother and I call it ‘funny money,’” she said.
‘They saw what poor financial planning looks like’
Alisa Livesay, a UD lecturer in finance, a certified public accountant and a certified financial planner, has taught millennials for years.
Young people today are accustomed to the world of online payments and debit cards, and too many are unfamiliar with how to reconcile checkbooks with banking statements, she said.
“They absolutely would have no idea how to do a checkbook because checkbooks are gone,” Livesay said.
But Bill Wood, a certified financial planner and Wright State University lecturer and director of the university’s Financial Services program, said some millennials have learned lessons from older generations.
“There’s no question that student debt is probably the single most pressing financial issue for millennials,” Wood said. “I think that’s probably true.”
But there are federal programs in place to allow debt to be paid “in a more forgiving way”, if not forgiven altogether.
Outside of student loan debt, however, Wood is not certain millennials are different than any other generation when it was young. This is a generation that likely well remembers the Great Recession of 2007-2009, he said.
“They saw what poor financial planning looks like,” he said.
‘Doing my own thing is not that big of a risk’
Besides running a trio of businesses, Snyder is working with like-minded friends on a “mobile market” for areas of Dayton lacking grocery stores with fresh fruits and vegetables.
For Snyder, every penny matters, and so does every minute.
“There are very few days where I don’t work at all — on my days off, I usually spend at least a little time catching up on emails, orders for the shop,” she said.
Burnette has started the Playground Theatre with her boyfriend, Christopher Hahn, 25, and she has started to work at Confetti, as well. (Hahn is a web designer at Catapult Creative, a Dayton web design and marketing company launched by millennials.)
As a non-profit, theater revenue is closely monitored, Burnette said.
“We’re so new, essentially all the revenue we bring in goes immediately back into the next shows,” she said. “We do have to keep track of things pretty well.”
If it sounds like a lot of work, it is. But these millennials say it’s worth it.
“Me doing my own thing is not that big of a risk,” Snyder said.
“Sometimes we will take less money to do what we love,” Burnette said.
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