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The Biggest Financial Pain Points of Your Employees and How You Can Help

By Insights Team on July 31, 2018

The Biggest Financial Pain Points of Your Employees and How You Can Help - PayActiv Financial Wellness Platform

When your workers go home at the end of the day, just like you, they are excited to see their families, spend time with friends, and take care of the regular needs they must meet in their daily lives. But depending on their financial circumstances, how they take care of their basic living needs might vary widely.

PayActiv financial wellness services helps users with their most common financial pain points. Follow along to find out how you can partner with PayActiv to make a difference for your employees.

Struggles paying the bills

When the rent is due, some of your employees might have a tough time coming up with the cash. Particularly in high cost of living areas, you could have workers that have to juggle the timing of bill payments in order to pay for groceries and other living expenses.

The average payday loan customer earns $30,000 per year, according to Pew Charitable Trusts data, and 58 percent struggle to meet their monthly expenses. If your employees head to a payday lender, which is legal in 36 states, they will pay an average 391 percent interest. Avoiding that massive cost could be a huge financial gain for employees with regular payday lending activity.

How PayActiv helps your employees: With PayActiv, employees have instant access to 50% of their earned but unpaid wages (up to $500) for a nominal flat fee. For instance, if they have worked for a week in a two-week pay cycle, they can access a portion of their wages early to help pay outstanding bills on time. They can even send payments directly from the app at no additional cost.

  • No more stress of waiting for payday to pay bills
  • Free unlimited electronic bill pay

No easy access to financial services

7 percent of households in the United States do not have a bank account, and an additional 19.9 percent are underbanked, according to an FDIC survey. When added together, that is nearly 30 percent of American homes without basic financial services. Odds are at least a few of your employees struggle here, but it may be more than you realize.

Without a bank account, something as simple as depositing a paycheck is not possible. Instead, your unbanked and underbanked employees have to take their paychecks to expensive and slow check cashing businesses. Instead of a simple online money transfer, they pay a small fortune in transfer fees for services like Western Union and MoneyGram.

How PayActiv helps your employees: PayActiv provides free bank transfers and free electronic bill pay to users with earned wage access.

  • No more costly check cashing, money transfer, or electronic bill pay fees.

Spending too much on monthly living costs

When you picked your cell phone provider, did you shop around for the best deal or just go with the most convenient option? Convenience has big costs, and switching to an alternate carrier like Republic Wireless or Google’s Project Fi can save you big every month. This type of savings extends to other parts of our lives as well.

Groceries, TV service, clothing, gas, internet, and other regular expenses offer plenty of opportunities to blow through the budget and then some. But for people living paycheck to paycheck, even small changes in spending habits can lead to big results.

How PayActiv helps your employees: PayActiv members enjoy several financial wellness benefits at no cost. For example:

  • PayActiv includes purchase discounts such as prescription drug discounts. Users simply login into the app, look for discounts near their location, and use it at stores where they already shop to get rebates.
  • Free self-help guides to learn about the costs and debt traps associated with expensive short-term loans, installment loans, and credit cards.
  • Access to free 1-1 credit counseling with trained financial coaches

No emergency savings

When you struggle to pay the bills every month and don’t have a bank account, the closest thing you have to savings may be a few bucks in a coffee can or under the mattress. An often quoted study found that 40% of Americans can’t afford a $400 expense in an emergency. As a typical car repair or home repair can easily exceed that cost, this serious problem leads to major financial fragility in your employee base.

If your employees can save up $400 or more in a savings account, they may be able to avoid some of the other financial pain points on this list. Avoiding payday lenders is easy when you have cash in the bank!

How PayActiv helps your employees: With PayActiv as an employee benefit, financial planning and transfers to savings are quick and easy. PayActiv helps employees save with an innovative savings system built right into the PayActiv smartphone app.

Poor credit

Your credit score is a gateway to many common benefits you might take for granted. A high credit score helps with new credit cards, low loan interest rates, easy signups for utilities and cell phones, and even getting a new apartment. With bad credit, you may struggle to find a place to live!

Great credit scores don’t happen on their own. It takes years of on-time payments, maintaining low credit balances, and other good credit habits to build a credit score in the 800+ club - credit scores range from 350-850. Your employees may struggle with bad credit, as bad credit plagues about 30% of Americans with a credit score.

How PayActiv helps your employees: Timely access to earned wages enables employees to match their pay day with their expense due dates. They are able to build a good credit score by staying current on bills.

How You Can Help

Partner with your employees for financial success

Talking about money is a big taboo to many people, so struggles with money can feel lonely and isolating. Partner with your employees for financial wellness and you should see an overall improvement in employee morale and productivity. After all, if someone is worried about paying the rent they may not be focused on your customers.

Work with your employees to help them with their finances beyond the paycheck. Through a combination of tools, apps, classes, and resources, you can help your employees level up their finances and achieve a new level of financial security they only dream about today.

Holistic Financial Wellness

Learn how PayActiv measurably reduces employee financial stress and employee turnover.

It's more than a paycheck.
It's peace of mind.

It's more than a paycheck. It's peace of mind.

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