Even Staff

2016-03-24

Millennials in Debt

All too often, the advice that millennials receive about their financial situations is so simplistic as to be unhelpful. The most commonly parroted themes revolve around making your morning latte yourself, looking for a second (or third!) job and getting a roommate. The truth is, the situations many millennials find themselves in cannot be overcome by simply cutting back on luxuries and living space. The problem often lies in the large amounts of debt millennials are carrying. Despite being one of the most highly educated generations, with nearly 25 percent of people aged 18 to 35 possessing at least a four-year degree, data taken from the U.S. Census shows that this group makes approximately $4,000 less than people who were the same age in the year 2000. Coupled by the fact that millennials graduating in 2015 reported an average of $35,000 in student loans, not to mention the thousands of dollars owed for credit cards and other consumer debt, it’s no surprise that skipping Starbucks isn’t the panacea it’s advertised to be. Millennials need real solutions and an effective strategy that enables them to not only eliminate their debt, but also build for the future.

 

 

Assessing and Prioritizing Your Debts

 

Having a clear picture of your financial situation is one of the most effective steps in solving a debt problem. It’s also the only way to ensure that solutions work, so this evaluation and organization should be your first step.

 

  1. Open a spreadsheet, or if you prefer, get a notepad and pencil.
  2. Go through all of your billing statements and other debt documentation and make note of the balance, interest rate and minimum payment due each month.
  3. Organize the debts from the highest interest rate to the lowest. You’re going to focus on the one at the top of the list.
  4. Make the minimum payment on everything except the debt at the top. This one should receive the minimum plus any extra funds you can throw at it every month until it’s paid off.
  5. Once the balance is zero, move on to the next debt on the list, using the money that would have gone to the previous debt to pay off the following one.

 

The biggest benefit of this method is that it saves you time and interest, as debts are paid off sooner. And once all your debts are paid off, the money you were putting toward those payments can become your savings and investment fund. You can keep putting the same amount away every month to contribute to your future without adjusting your budget. This is especially helpful to millennials, who have to be extra mindful of balancing their current cost of living with the undeniable need to save for the future. But if you need to free up some cash or want to pay off your debt sooner because of exorbitant finance charges or other fees, there are options for refinancing your debt to gain more control over your finances.

 

Tangible Solutions

 

Paying down debt is a priority, but there are other things you can do to assuage your current concerns and help you look optimistically toward the future.

 

Personal Loans

 

Getting into debt to get rid of debt sounds counterintuitive, but there is a distinction between good debt vs. bad debt. Using good debt such as low-rate personal loans to pay off bad debt like high-interest credit cards and student loans can save you money and time. While this solution is relatively unexplored by millennials, it's popularity is increasing as a growing number of online lenders begin offering solutions. For millennials, online lending may be a better choice than traditional sources of loan funds such as banks because of the more stringent credit and income qualifications of conventional institutions. Alternative finance companies are providing new solutions for the financial problems faced by the millennial generation. Using these new services, along with some effective technological tools, can help you redirect your future and make steady gains toward financial stability.

 

Balance Transfers

 

Shifting your high-interest credit card balances to a card that offers 0 percent interest is an excellent way to jump-start your debt payoff. Balance transfers stop your debt from accruing any new interest, usually for a period of three to 18 months, but you will likely have to pay a balance transfer fee, which can range from $5 to five percent of the balance. Without the added interest, you can pay down your balances faster and save yourself a good amount of money. Interest will kick back in once this period ends, however, so you will either have to pay it off before time is up or transfer the remaining balance to another 0 percent card.

 

Freezing Cards

 

While you could literally freeze your credit cards in a block of ice to prevent new charges, card companies are giving consumers the ability to freeze their accounts from authorizing new spending. You can usually do this over the phone or online, and it’s just as simple to unfreeze if you need to use your card again. Some cards have a time limit on this practice, so contact your card issuer to find out how long you can keep your account frozen before it's canceled for non-activity. If the card is canceled, it will appear as a closed account on your credit report, which can lower your credit score.

 

Digital Tools

 

There are many apps and websites that can help you take better control of your finances. Mint and other budgeting applications can connect to your bank and credit card accounts to give a comprehensive picture of your spending. You can then create a personalized budget and keep track of how well you’re adhering to it. While paying down high interest debt is vital, it's still important to put some money towards savings and investments. Putting $25 to $50 into both your emergency savings and investments every month can give millennials a better sense of control. You can use apps to make periodic transfers from your checking account into your savings and investment accounts. Digit, for instance, analyzes your spending habits to determine when you can best afford to make transfers of $5 to $50 throughout the week. Apps such as Acorns round up the amounts of your purchases to the nearest dollar and send the change to an investment account. You can even transfer these funds to a robo-advisor service that automates your investing decisions, creating a nest egg effortlessly.

Disclaimer: The material provided on this site is not intended to provide legal, investment, or financial advice or to indicate the suitability of any Even Financial product or service to your unique circumstances. For specific advice about your unique circumstances, you may wish to consult a qualified professional. Any information or statistical data sourced by Even Financial through hyperlinks, from third-party websites, are provided for informational purposes only. While Even Financial finds these sources to be accurate, it does not endorse or guarantee any third-party content

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Even Financial Partners with Figure to Add Blockchain-Enabled Personal Loan Products to its Financial Services Marketplace
EVEN
Even Financial Partners with Figure to Add Blockchain-Enabled Personal Loan Products to its Financial Services Marketplace
New York, New York – June 2, 2021 – Even Financial (“Even”), the leading search, comparison, and recommendation engine for financial services, has announced a new partnership with Figure to launch the company’s personal loan products on the Even platform. Leveraging machine learning and advanced data science, Even solves a significant pain point in financial services acquisition by seamlessly bridging financial institutions and channel partners via its industry-leading API and embeddable solutions.   Figure is a fintech company that leverages AI, blockchain, and analytics to deliver innovative consumer financial products with speed and ease. Figure has dramatically decreased the time it takes for consumers to secure loans and has significantly reduced the costs associated with loan origination, servicing, financing, and capital markets execution. The company was founded in 2018 to unlock new access points for consumer credit products that can transform the financial lives of its customers. In addition to personal loans, it provides mortgage refinancing and home equity release solutions, including home equity lines of credit, home improvement loans, and home buy-lease back offerings for retirement.   Figure is an exciting, advanced provider that is driving transformational change in consumer credit,” said Phill Rosen, Founder and CEO of Even Financial. “We’re thrilled to welcome them to Even’s unparalleled network of loan products.”   Shwetabh Gautam, Director of Financial Institution Partnerships at Even added: “We continue to see a strong resurgence in the demand for lending products across the millions of consumers Even surfaces offers for each month. The addition of cutting-edge partners like Figure strengthens our ability to connect consumers with the loans best suited for their unique needs.”   Even offers the largest network of premium, API-connected loan providers. Enterprises and established publishers such as MoneyLion and TransUnion partner with Even to power financial product offers for loans and other financial services including insurance, credit cards, and savings. Within loans, Even continues to expand its vast offering, recently launching products for secured lending, line of credit, and auto refinancing.   The launch of Figure on the Even platform enables consumers to get matched with personal loans of up to $50,000. Figure offers a 100% online application that allows applicants to apply and see their rate in minutes and access funding in as few as two days.   “Phill and the team at Even share our vision of leveraging blockchain technology to make financial services simpler, faster, and personalized. Through the Even platform, we will be able to reach a broader and more diverse set of consumers seeking our innovative credit products,” said Brad Simmons, CMO of Figure.   Even has continued its rapid growth trajectory in 2021, facilitating over $3 billion in consumer credit issued through its API and expanding its platform to over 400 partners. Earlier this year, Even was named one of “America’s Best Startup Employers'' by Forbes for 2021 and placed in the Top 50 of the 2020 Deloitte Technology Fast 500, which recognizes the fastest growing tech companies in the world.    About Even Financial Founded in 2014, Even Financial is a B2B fintech company that is transforming the way financial institutions find and connect with consumers. As the leading search, comparison, and recommendation engine for financial services, Even seamlessly bridges financial institutions (including American Express, Goldman Sachs, and SoFi) and channel partners (such as MoneyLion and TransUnion) via its simple yet robust API and embeddable solutions. Even turns any consumer touchpoint into a comprehensive financial services marketplace with full compliance and security at scale. The company is backed by leading financial services firms and VCs, including American Express Ventures, Canaan Partners, Citi Ventures, Fidelity’s F-Prime Capital, Greatpoint Ventures, Goldman Sachs, LendingClub, and MassMutual Ventures. Learn more at www.evenfinancial.com.  About Figure Figure is transforming the trillion dollar financial services industry using blockchain technology. In three short years, Figure has unveiled a series of fintech firsts using blockchain for loan origination, equity management, private fund services, banking, and payments sectors – bringing speed, efficiency, and savings to both consumers and institutions. The company was founded in 2018 by serial technology entrepreneur Mike Cagney, who also founded SoFi and built the company into a multi-billion dollar business under his leadership as CEO. Learn more at www.figure.com.   Media Contact media@evenfinancial.com
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PYMNTS
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Now, financial advisors and other businesses will have a way to leverage Even’s platform for their clients. ‘Financial Products for Salesforce’ - Powered by Even, a plug-and-play app available on the Salesforce AppExchange, matches consumers with real-time, personalized financial product offers.   Click below to read more at PYMNTS.com.
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