Series on Gen-Z & millennials struggles with expenses/debt

[willowsbible]

Hi. I'm a reporter and I'm working on a series about Gen-Z and millennials financial struggles, particularly around using payday loans at the moment. I've seen a lot of posts about shortfalls between rent due and financial aid checks coming in, which I think is a huge issue we need to really spotlight.

The first article published yesterday (https://www.cnbc.com/2018/08/01/1-in-3-college-age-americans-consider-payday-loans.html), but I'd like to talk to more folks who find themselves in these types of situations--college students who are balancing work and school in order to (hopefully) pay the bills, recent grads who are juggling loans, jobs and living expenses or folks who couldn't finish college but are trying to make it work.

If that sounds like you and you're interested in sharing your story, please comment or send me a p/m.

EDIT: Just wanted to update those who were interested. Here's the second article in this series: https://www.cnbc.com/2018/08/14/millions-of-millennials-are-taking-out-risky-payday-loans.html Again, if you're interested in sharing your experiences, feel free to reach out!

 

[davecb]

@willowsbible

Having tried and failed to get a credit card, Wilson approached his bank for a loan, but the minimum was $3,000 — way more than he wanted to take on, given his approximately $30,000 in student loans.

Did no one tell Wilson he can get a loan for $3,000, then use some of it, and then instantly pay back what he doesn't use? Why are payday loans a more attractive option to him? We definitely need better financial education in American public schools. There are a lot of pointless or at least less necessary things being taught and barely anything is taught on how to actually make rational financial decisions.

Anyways, I don't qualify for anything of who you'd want to talk to but if you link your article here I'll read it. Interesting stuff.

 

[resjudicata]

@davecb You're absolutely correct. More education on actually living and surviving in the world. When I got out of school I stumbled not knowing the credit game. Additionally I didn't know that you have to call to have your electric bill transferred to your name. Sounds ridiculous but it's true. The most basic things in life that are crucial are sometimes not taught.

And yeah my parents sucked at teaching me anything about life. They had the "he will figure it out like we did" bullshit

 

[davecb]

@resjudicata Yea man, things like "how to shop for insurance", "what qualifies someone for a mortgage", "how to improve your credit score", "why monthly car payments look fine but are actually awful when they're stretched out 7 years", "why retirement accounts are helpful".

all those nowadays seem like way more useful things to know than like high school geometry. How many of you need to calculate trigonometric ratios of a triangle or whatever vs the things you actually need to know to get ahead in life or at least just make smart decisions. I see a lot of times where people are missing like fundamental aspects of financial planning/budgeting/etc. Basic things like why the interest rate matters.

I look back at how much we talked about consumer interest rates in high school classes and realize it's close to none.

 

[onceemt]

@davecb I actually took a course about all of these in high school. We went to car dealerships to discuss the importance of negotiation, asking for the invoice to see the markup, and how to assess whether a deal is good when purchasing a vehicle.

We went to the grocery store to shop for a week’s worth of groceries on a $30 budget for one person. We actually learned how to asses whether buying in bulk would save us money as well as ways we could store and use foods so that we weren’t wasting them. We also learned how to use coupons to get the best deals (I grew up in a rich neighborhood, using coupons wasn’t something you generally did).

We talked to loan officers about ways we could effectively build credit without taking out massive loans, how to asses how much you’re paying in interest over the life of the loan, how it’s better to get too big of a loan if it’s a personal loan so that you can put at least 3 months worth of payments into savings just in case you cannot afford your payment one month.

We also learned about what to look for in an insurance policy and why you should never go without (this was before the ACA and you could be denied if you had any sort of health issue).

We learned a ton more, but these are things that really stand out to me because they really are life skills that people can use in everyday life.

 

[davecb]

@onceemt That sounds like an excellent course and was really what I would've wanted to see when I was growing up. I mentioned in a different comment that it wasn't so much that the geometry or whatever isn't useful but more that every adult with responsibilities can make use of learning about personal finance. Not everyone goes on into math related jobs or careers. Sure, knowing some basic math helps but knowing basic personal finance "traps or pitfalls" probably helps the average adult more.

I think the fact that you remember those lessons and they at least made you aware of things that you may otherwise not have been exposed to illustrates how useful they are.

I think it's way worse to be thrown into a "personal finance emergency" and not know how to get out of it (like this reporter's article: "I guess I take a payday loan... I've at least seen those around and they must be for people like me.") than it is to be in, and sorry for another bad example, a triangle calculation emergency where you absolutely have to know the length of the hypotenuse.

 

[resjudicata]

@onceemt That sounds awesome. My high school taught a similar but more stripped down course but ONLY to students who were in the “every day living stream” aka the not book smart kids the school thought no chance in hell of doing anything academic after high school. They learned how to do their own taxes, cooking, laundry, budgeting, how to use public transport etc. Would’ve been great if they had classes like that, or more in depth like yours, available to everyone

 

[calloffaith]

@onceemt

asking for the invoice to see the markup

Wait, you can ask the dealership for the invoice?

 

[michaelfrancis]

@davecb

"how to improve your credit score",

Personally i think its a crime that schools don't teach students how to begin building credit at 17, At-least they can inform them on authorized usership etc. to better prepare them for adulthood. You would think that since credit is needed for almost everything, they would make room for it on the schools curriculum. smh

 

[joshcon]

@davecb How to manage money?How to apply for loan? How to do that damn tax?
I never taught how to do this in school or from parents.

 

[pjgirdwood1]

@resjudicata Unfortunately “figuring it out”is a lot harder than it used to be when they were starting out. I wish more people recognized that.

 

[willowsbible]

@davecb From my experience, I've heard from a lot of students are hesitant to take on any extra loan money they don't need because they're overwhelmed with student loans. Perhaps irrationally so. That said, you have a great point about better financial education.

 

[mysz]

@davecb Regardless of what may seem like a poor decision, he likely wouldn't have been approved for the bank loan anyway. Students are often the most difficult to qualify for traditional loan underwriting. They're often more stringent than the requirements for credit cards. Living expenses are generally not a qualified loan purpose for most traditional lenders, they are not established in work or residence and they lack seasoned credit history.

As a credit union manager, I can tell you that our industry is working to develop alternatives that provide access to "small dollar" loan amounts. I'm actually a little disappointed that we weren't mentioned as an alternative in the summary of this article.

https://www.mycreditunion.gov/what-credit-unions-can-do/Pages/payday-loan-alternatives.aspx

 

[davecb]

@mysz oh I thought it was implied he was approved for $3k and then said no because it was too much $. I could be wrong though.

 

[maddyalexis21]

@davecb A better financial education would have prevented the 2008 crisis.

 

[marca1984]

@davecb Just a weird question - why public school and not at home? I mean, we've all learned about interest in school, but how many people actually apply it?

 

[davecb]

@marca1984 It should be both in my opinion. Like yea, I'm lucky and had parents who taught me that stuff - but for something as useful as personal finance why not do more in school for kids who aren't as lucky as me? I think there was a guy saying it's the parent's responsibility to teach their kids everything and yea, I agree parents should be teaching but not every kid is going to have that.

I think public school is like the "bare minimum" of learning kids should have and I strongly feel that personal finance doesn't have enough of a "bare minimum" being taught. Like, a baseline understanding of risks and traps and finance strategies could help kids from making huge life-altering mistakes with debt or other pitfalls. I will say this is just from my experience in public school 15+ years ago so maybe it's different and better now.

Anyways, those kids lucky enough to have that education at home probably have a stronger support system in general - so for the ones who need personal finance help the most, they might as well get some in school.

 

[maxi00]

@davecb

We definitely need better financial education in American public schools.

No, parents should be responsible for raising their own children.

 

[davecb]

@maxi00 then why aren't parents responsible for teaching them Shakespeare or quadratic formula or avogadro's number? why is personal finance special?

 

[maxi00]

@davecb They are responsible for that too--they're their children. Education doesn't begin or stop in school.