For years, you’ve heard various statistics about how a certain percentage of Americans lacked the savings to meet a certain expense, usually something around $400. These statistics cause a great deal of upset, as some ask why wages aren’t higher, and others ask how this number could even be real. In fact, lots of questions are triggered by these statistics, and some even question the actual percentages and amounts.
Whether the quoted percentages or shortfalls are accurate isn’t as important as the fact that there is one question that is rarely asked:
Why don’t people have as much savings as they need?
The more we understand what the reasons are for this shortfall, the more we – both you and PayActiv – can mitigate them. The more financially secure your workers feel, the happier they will be, and the better they will perform for you. Even more importantly, if your workers feel that you are helping them to become financially secure, you will be rewarded with increased productivity, engagement, and retention.
Look at this 2019 Bankrate.com survey:
By inference, 54% (“expenses” and “job isn’t good enough”) cannot save money because their salary isn’t high enough to do more than cover expenses. Another 13% are servicing debt that prohibits saving. That means two-thirds of Americans cannot save money because their circumstances simply don’t permit it.
Amazingly, things are even worse.
Another Bankrate survey showed that when an emergency arises, they tend to be extremely expensive. 4 in 10 would pay the costs…from their savings! So even those workers who do save are confronted with emergencies that prevent them from keeping their saving locomotive running.
For those who don’t dip into savings, 37% put themselves in the same hole by taking on some form of debt.
This is why it is so challenging to save money in America.
It seems easy to suggest that this demographic just cut expenses. Yet this demographic are, in fact, the savviest budgeters you will find. They know exactly where they spend their money, they know every coupon to clip, which stores have necessities at the lowest prices, and are able to pair income with expenses and time disbursements to the hour.
Alas, bills and creditors do not wait for the consumer to get their ducks in a row. Bills and payments are due when they are due. If a consumer is late, they get hit with a late fee. If they must write a check to satisfy the debt, knowing it will bounce, they will get hit with an NSF fee and a merchant fee. In the worst case scenario, the worker will use a payday loan – at a cost of $15 to $30 per hundred borrowed – to make ends meet.
This is where you, the employer, come in.
By offering PayActiv to your workers, you are saving them those fees. By giving them timely, on-demand access to wages they’ve earned but not yet been paid on, they can meet all obligations without incurring those onerous fees. Those fees add up to some $2,400 every year, or $200 per month.
While some workers will take the savings and buy necessities, or deploy the money into some other form of self or family well-being, others will plow that money into savings.
When you offer PayActiv’s Earned Wage Access feature, and combine it with our free financial counseling, you are giving your workers the tools they need to become more financially secure.
Hopefully, you understand a bit more about why it is so hard to save, and how you are helping your employees to become financially stable. Trust us when we say that they appreciate it. They appreciate you. The more you do in this area, the stronger your business will become.
Holistic Financial Wellness
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