Current Events in Personal Finance-Part 2

Rutgers Cooperative Extension recently sponsored Financial Education Boot Camp (FEBC), a full-day conference designed to build the capacity of New Jersey educators to teach personal finance. FEBC featured a presentation about trends and current events about financial topics. Below are five more questions that were asked and a brief explanation of each answer:

What factor influences helps people make better spending decisions according to a 2019 study?

Peer pressure. Researchers found that people cut their spending- sometimes drastically- when they are told they are spending more than others in similar circumstances. Information was provided to respondents via a phone app with peer spending data.

What record number did outstanding consumer debt in the U.S. exceed for the first time ever in 2019?

The new consumer debt record was $4 trillion. Factors contributing to this staggering number included strong holiday spending in 2018 and a steady rise in student loan balances and automobile financing. Consumers, on average, are spending about 10% of their disposable income on non-mortgage debts.

Which type of retirement savings plan is being mandated (or at least considered) by an increasing number of states in 2019 for use in state-run retirement plans for workers in small and medium-sized companies?

Laws to establish state-run Roth IRA-like retirement plans for private sector workers are increasingly being passed (or considered) because large numbers of U.S. workers, particularly those in small or medium-sized companies, are not saving enough for retirement. Employees are automatically enrolled in the state-run plan but can “opt-out” if they want to.

What percentage of taxpayers filed their federal income tax returns electronically in 2018?

There has been a steady increase in the number of tax returns that are e-filed each year from 30.7% in 2001 to 92% in 2018. Taxpayers who e-file and use direct deposit typically receive a refund within 21 days. Paper filing adds another 6 to 8 weeks.

What happened in 2019 with respect to the CFPB’s payday lending rule that requires lenders to check borrowers’ ability to repay short-term loans including payday loans and car title loans?

The CFPB reversed course in 2019 and rolled back proposed protections that would have required lenders to ensure that borrowers could repay payday loans. Another rule to halt repeated withdrawals directly from borrowers’ accounts (often resulting in pricy overdraft fees and/or damaged credit scores) was delayed until at least November 2020.