How could earned wage access benefit me?

In a survey conducted by Harris Poll on behalf of Ceridian, more than eight in 10 U.S. workers with household incomes exceeding $100,000 said employees should have the option to access earned wages at the end of each day or shift.

The good news is – organizations are listening. The pandemic has encouraged organizations to move away from antiquated processes and find innovative ways to support their people and improve employee satisfaction. Along with benefits such as remote work, tuition reimbursement, and more support with mental health resources, 73% of organizations agree that they have a responsibility to help their employees with financial wellness, according to Sun Life.

With many people wanting more control over when they’re paid, on-demand pay options give employees that flexibility.

Earned wage access gives you access to your wages the day you’ve earned them, instead of waiting for the old-fashioned, two-week pay cycle. You may not have considered this option before, but this freedom is appealing for a variety of reasons. Read on to learn why having the option for on-demand pay should matter to you.
 

You want to avoid debt from payday loans

Many people live paycheck to paycheck and may have to rely on predatory payday loans or cash advances. The average payday loan’s APR is a staggering 398%, according to Debt.org. You can become trapped in a never-ending cycle of debt that is difficult to get out of.

Plus, struggling with interest and fees isn’t a fair and equitable experience for everyone. Financial Health Network reports that in 2020, financially-vulnerable households paid a combined $255 billion on interest and fees for everyday financial services, compared to $47 billion paid by financially-stable households. It isn’t always fair that people struggling with money are more likely to spend even more on additional loan fees.

Earned wage access can help you avoid payday lenders or credit cards with high interest rates. One of the benefits of earned wage access is that your pay is your own money, not an estimate or a loan you have to pay back with high interest rates or fees.
 

You want to be prepared for an unexpected expense

The cost of living continues to go up. When you are dependent on next week’s pay, it makes it difficult to save money for an emergency. Unexpected bills can cause a lot of stress, whether it’s a broken appliance, sudden medical bill, an unplanned expense.

Financial anxiety can keep you up at night too, contributing to poor physical and mental health issues and disrupting your day-to-day life. Ever been in a situation where you have a bill due on the 20^th, but you don’t get paid until the end of the month? One in three Canadians told the FP Canada 2021 Financial Stress Index said that worrying about money has led to health problems.

Earned wage access can help you avoid late fees by giving you access to your money in time to pay your bills. There’s no extra effort to easily use money you’ve already earned from shifts you’ve worked.
 

You may not find value in traditional banking and associated fees

Financial services are expensive for many people. The most recent FDIC Survey of Household Use of Banking and Financial Services found that approximately 7.1 million households did not hold a checking or savings account at a bank or credit union.

Living outside the financial system can be difficult, though. Being unbanked can make it difficult to qualify for credit cards or secure financing for a car or home.

On-demand pay offers flexibility and convenience for people looking for other ways to manage their money. Some people prefer to manage their earned wages with their prepaid card for bills, purchases, and more as an alternative to a traditional bank account. With Dayforce Wallet, the money you add to your card is pay you’ve already earned.
 

You should be in control of managing your money

The stock market was historically dominated by people with financial backgrounds or retirement fund access through employers, but new platforms have made investing much more accessible to individual investors in the last few years.

Notable stories such as GameStop have showed how many people have gotten into trading and the powerful influence of individual investors. FINRA Investor Education foundation in partnership with NORC conducted a study on new investors in 2020, and found they tended to be younger, earned lower incomes, and were more racially diverse than other experienced entrants surveyed.

The ability to grow individual wealth and plan for the future can be valuable for your long-term financial wellbeing. If you’re building your portfolio, you may not want to dip into your savings and be forced to sell when you run into unexpected expenses. With earned wage access benefits, you can access your money as you earn it, without additional hoops to jump through. That means you can cover unexpected expenses between paydays without pulling money out of your savings or investments.
 
There’s no shortage of earned wage access benefits, no matter your situation. When you have more control over managing your money, you can reduce stress and be on the road to achieving financial wellness in the long run.