Category Archives: News

Budgeting Is Difficult for 20-Something Year Olds


According to a report in USA Today, people in their 20’s do not spend a lot of time budgeting their money. That includes saving receipts, monitoring what they spend or cutting back on spending. Instead, many Millennials are more concerned about finding employment, paying back their student loan or spending time with family or friends. The energy it takes to establish a budget is consumed elsewhere. However, a failure to budget can also have long-term consequences for anyone in the 20-something age group.

A New Financial Influence

The USA Today report claims that almost 45 million people in the US are classified as Millennials, thereby making 20-somethings the largest age group in the US. As a result, the saving and spending habits of this demographic can shape the economic future of the country, all which makes financial tracking a necessity.

Some of the challenges that Millennials deal with when budgeting include the following:

  • Their job does not pay well
  • They are not savvy about personal finance
  • They try to keep up with the spending of their friends
  • When the economic recession took place, a 2013 study revealed that six out of 10 Millennials held jobs, with 30% of that number only working part-time. With a large number of young people underemployed or working part-time, it is not surprising that they have not established a budget.

    Financial Limitations

    In addition, a 2014 study showed that only 18% of 20-somethings could answer four or five fundamental questions about finance. Because most colleges do not usually include personal finance in their curriculum, Millennials often learn about money management from parents. For any young person who does not have this kind of exposure, budgeting can be even harder to follow. Either that, or it does not hold the interest of someone in this age group.

    Young people are also affected by peers, whose spending is a major priority. As a result, socializing with friends whose salaries are larger can prove to be difficult. However, Millennials, according to financial experts, can overcome some of their budgeting challenges by using today’s technology and setting up automatic savings plans. They can also use online tools to establish their budgets and their savings goals or needs. For example, instead of saving $600 per month from their income, they might try saving 10% of their monthly income and include it in their savings.

    Attorney General Meets With CFPB Head Over Bad Credit Loans

    Leslie Rutledge

    After the Consumer Financial Protection Bureau (CFPB) announced its series of proposed rules for the payday loan industry, there was no shortage of reaction. Some say the new federal regulations are too timid, while others say the CFPB’s proposed guidelines go too far.

    The response was mixed, but one public official was upset about the entire process, arguing that CFPB director Richard Cordray ignored the states and state officials from the very beginning.

    One of these state officials is Arkansas Attorney General Leslie Rutledge. Immediately following the CFPB’s June 2 announcement, the Arkansas AG confirmed that she tried meeting with Cordray and encouraged him to establish a “conference of states” to garner state feedback.

    Rutledge also outlined her concerns of the federal government intervening into a state issue.

    “By disregarding my request and the concerns raised by many others at the state and federal levels about sweeping federal standards that would govern small dollar lending, Director Richard Cordray has made it clear that he is not interested in cooperative federalism,” said Rutledge said in a statement. “This one-size-fits-all federal approach from an unaccountable bureaucrat and agency ignores the interests of the states and will negate reasonable policies that already exist to protect consumers while at the same time allowing the free market to function properly.”

    Her statement apparently garnered the attention of CFPB and Cordray. It was confirmed that Rutledge held a meeting with the CFPB director on Wednesday to discuss businesses that offer small loans for bad credit and how new rules at the federal level would affect high interest bearing businesses and state legislation.

    The two officials met in Little Rock, where Rutledge reiterated her request for a conference of states. This conference would see state leaders and the CFPB talk about the federal regulations for payday loans and other financial products.

    Arkansas, for instance, prohibits payday loans. Other states, meanwhile, have their own regulations for the payday loan industry. In recent months, some jurisdictions have either become more open to this niche and other states and municipalities are trying to rein them in or kick them out.

    “I made clear that holding such a conference is the right thing to do anytime a federal rule is going to supplant the reasonable policy choices of either Arkansas or other states,” she said in a statement.

    Rutledge added that she does think the CFPB will meet with Attorney Generals across the country.

    CFPB’s Consumer Advisory Board is scheduled to hold an automobile lending education seminar and payday loan lending at Little Rock’s Statehouse Convention.

    It’s unclear if the CFPB will take into account state concerns. The CFPB confirmed last week in Kansas City that it was holding a 90-day public consultation period. But experts say the CFPB will likely implement the new federal regulations for payday loans next year since they do not need approval from congress.

    Proponents say that payday loans are necessary for impoverished consumers who do not have access to traditional forms of credit, especially when they’re facing pecuniary destitute. Critics present the case that payday loans help put consumers into dangerous situations by entering into a spiral of debt.

    Since the launch of the CFPB, President Obama has encouraged the federal consumer watchdog agency to tackle payday loans and other financial products, such as auto-title loans.