which way will it go

[Smallsteps]

https://www.nytimes.com/2017/12/13/b...-advances.html I keep seeing more and more apps/ options ( chime) that think they can change habits or bad money management. I do not see it as these are tools only as good as the USER, but since most financial habits or problems are often rooted in emotion or rationalizations i doubt an app will fix that. I hope i am wrong i wish some people could catch a clue on how they are their own worst enemy in finances.

[disneysteve]

I think there's a lot to unpack from that article.

First, I think it's great that Walmart is doing that. If it keeps employees from turning to payday loans or title loans or other predatory products, that's fantastic. And if it keeps anyone from something like going without medication for a few days because they don't have the money for a copay until payday, that's also fantastic. Will some people misuse it? Probably, but a lot of people will also benefit from it.

My MIL used to work for a company where they were paid weekly. For years, the company wanted to switch to paying every 2 weeks but every time they brought up that idea, employees freaked out because they didn't know how they would afford to live for the week they didn't get a paycheck in the transition. Paycheck to paycheck living is a real thing. It's how most Americans live, up to 60-70% according to most studies. Miss one paycheck and a lot of people would be in deep trouble. Having the ability to draw some of their next paycheck prior to payday would alleviate a lot of that stress.

The fact that this app also helps employees with budgeting and tracking spending is also great as that's clearly something that people struggle with. Most people have never been taught how to do that and have nobody in their lives to turn to for help so they keep stumbling along doing what they've always done. A little outside guidance can go a long way in changing behavior and improving outcomes.

The article also talks about how Walmart pays less than Costco and Target. That's true but does that automatically mean that Walmart should pay more? Why are all of the Walmart employees working there and not at Costco and Target? I've got at least 5 Walmarts within 20 minutes of my house. I also have at least 5 Targets in the same range. There's only 1 Costco. Clearly, not everyone is able to get a job at Target/Costco and some had to settle for Walmart. Or Walmart was easier to get to with public transportation or was offering hours more favorable to their family needs or whatever. Ultimately, if Walmart was having trouble filling openings, they'd be force to pay more to attract people but that doesn't seem to be the case.

[Smallsteps]

While i see the point of people able to access in case of emergency but there is a limit to access for free ... the app will end up costing $6 per month. While not alot like you said for those already struggling that might not be the best taking on another fee. I worked for many years and still do as a temp get paid weekly. It can be hard to adjust to a 2 week especially if you do not have any float. I just doubt the effectiveness of app. As for who pays what that is really objective many retail have a scale and often all on the same levels based on hours in etc. Walmart i know pays on merit and often the biggest producers make the most as opposed o a one size fits all. Often unfortunately for Walmart the people whom apply are not ones that will advance on merit. The same scale retailers often get clock riders that do very little i HATED it that even when i put in a lot of effort the nose picking imbecile made the same per hour based on time in not effort.

[Smallsteps]

That is the biggest issue in the lack of financial education ... there is no money in it. Those who need the help most can not afford it. But there is no lack of those whom make a business off this lack of financial education and can least afford it. I wrote before of a CU i joined that pay big interest for small/ under $500 balances( 4% for checking/ 6% for savings) ... made no sense to me until i saw them accused of having insane fees for any overdraft/ withdrawals punishing those least likely to manage money well.

[disneysteve]

The app will cost employees $6/month? That wasn’t in the article. If that’s true, that might change my opinion. If they can just up for a month when they want to use it, that’s not terrible, but if they need to pay every month whether they use it or not, that’s a problem.

[Smallsteps]

I read more then one of these articles i thought this one was the one who spelled it out Walmart must pay for employees to access twice every 8 weeks any more then that and all the budget help etc cost $6 a month.

[disneysteve]

Yeah, I don't think I'm onboard with the $6/month fee though for folks who are actually motivated to improve, $72/year isn't such a bad deal. That could pay off many times over if it helps them develop better financial habits.

[Smallsteps]

i used to see a bunch of TV ads ( chime still heavily advertised) and they seem to have almost disappeared but there seems to be many products aimed at those whom are grasping for a lifeline and the Devil is in the details. Perhaps avoiding a one time car repair or emergency instead of the payday loan option would be helpful. but as with MOST financial items some may be able to use wisely others will simply dig deeper IMO. I do not think it is an employers place but someone, somewhere need to really spell things out and TEACH good financial habits. I remember when i was in retail and a competitor of my employer paid early in the week .I asked (a management person there) why the answer was quite surprising but honest. The founder of store saw that a Friday payday often led to easy spending over the weekend and paying midweek people did not blow their pay on weekend events and more ended up in a bank. A good idea but all of these items seem to follow the old saying .... You can lead a horse to water......

[disneysteve]

So much of personal finance is behavior-based. If an employer can do things, big or small, to encourage better financial behavior, I support that 100%. I love the story about the employer paying at the beginning of the week and seeing employees blow less on the weekend of payday. That's a great example of a simple change resulting in noticeable behavior modification. Having to opt out instead of opt in to a 401k is another example. I don't care where the financial education and support comes from. School, work, church, whatever. It's all good. People need help. The more the better.

[Smallsteps]

So much of personal finance is behavior-based. If an employer can do things, big or small, to encourage better financial behavior, I support that 100%. I love the story about the employer paying at the beginning of the week and seeing employees blow less on the weekend of payday. That's a great example of a simple change resulting in noticeable behavior modification. Having to opt out instead of opt in to a 401k is another example. I don't care where the financial education and support comes from. School, work, church, whatever. It's all good. People need help. The more the better.

I am on the fence personally while i see your point that MAYBE and it is a big maybe some item will flip a light switch on and a small percentage of people may seek out to learn about personal finance ...I often feel these items are much like a parent overshadowing an adult child telling them what to do at each step in life.
Too many IMO want someone else to make the decisions and do the research but they want to benefit from the other persons work.

When reading about scams or pyramid schemes( Madoff / Enron etc) i was always puzzled as to how so many could miss the red flags. I am sure many just believed whomever told them "nothing to see here, just trust me".

Then I look at the tons of people whom want their employer or government to become their parent and take care of it for me. This reminds me of the company towns in the old west where everything was owned operated and ruled by a company.

Until people learn to do for themselves i can not see any improvement.
Many people are losing out with the opt out instead of opt IN idea .... they do not read it then some question AFTER they see a deduction from their check or if they do not stay at job very long they OFTEN cash out pay a penalty and are back at ZERO or below after taxes and fees.
Some do nothing after receiving notices to rollover etc and then any little dab they have is sucked up in fees until it is gone.

Apps like any program will have garbage in - garbage out.

[LivingAlmostLarge]

I think it might still be better for $6 a month to avoid payday loans? Being poor is tough. It sucks because one accident can cause you to spiral fast. It's really difficult because you are living paycheck to paycheck and then wham a medical bill.

It's weird to look at this way but typically people with better paying jobs have better medical insurance so they have less "medical" costs. So then they are able to keep more of the money. But the people who are the most vulnerable are the ones mostly likely to get hit by an unexpected bill and sink down into BK or something they can't get out of.

[Smallsteps]

I think it might still be better for $6 a month to avoid payday loans? Being poor is tough. It sucks because one accident can cause you to spiral fast. It's really difficult because you are living paycheck to paycheck and then wham a medical bill.

It's weird to look at this way but typically people with better paying jobs have better medical insurance so they have less "medical" costs. So then they are able to keep more of the money. But the people who are the most vulnerable are the ones mostly likely to get hit by an unexpected bill and sink down into BK or something they can't get out of.

The article says Walmart allows access for free for up to 2 times per quarter/ 8 times a year that seems to me plenty of access to avoid payday loans if someone is over that limit their issue will not be solved for $6 a month app.
The issue is personal finance education is kicked down the road AGAIN leaving many with zero idea of how to handle money, IMO because some do not want to see the details. Many do not want to see many items ARE self inflicted. I see it at various income levels.

My only issue with this seems to be how many ideas or programs are sold to those who may be desperate.
It is beneficial to all IMO if more people Learn/ embrace and practice good financial habits.
Just saying "well it is harder for xyz" let's create an app and make a bunch of money from those whom really can not afford it.
It is like junk diet programs look at the billions of $$ chasing each new diet answer ... look at those products that KNOW all you need to do is put the fad wording on it. It was low fat then low carb now you see items that have not changed their ingredients but if seen as "keto" friendly on label, it will boost sales.


The clear tie in medical (regardless of insurance status) is being proactive and follow thru. I knew many people with CLEAR symptoms something was wrong that put off treatments regardless of insurance status not always money but often not wanting to KNOW. Once they find out and they need to change lifestyle..... how many do that / quit smoking-drinking/ lose weight etc

People with lower medical costs most often are those whom take an active role in maintaining their health and avoiding risks, the same as people working on finances.

If your car has had the check engine light on and the engine blows people have small sympathy, but if someone complains of pain and issues for over a year and then finds it is advanced disease it is all "bad luck" and "how could they have known, it is so sad"

I literally have worked from first job low pay retail to upper corporate and the habits/ pitfalls are the same. I have lost a lot of empathy because of it.

Someone sets up a go fund me or someone collects around work because someone is going to get their power shut off .... next week they show everyone tickets they bought to a 3 day music festival 200 miles away and their car is barely hanging on ask for rides everywhere but it is good to go for a road trip for concert.

Someone notices a co-worker never eating lunch come in and buys them lunch items then finds out the "poor" employee is paying 1200 for tattoo arm sleeve.

Current co-worker complaining they can not afford medical coverage but...... buys / treats ( cookies/ doughnuts) and candy for the whole office every week and volunteers to make lunch runs etc using their own fuel and often ends up with you can pay me back later because she is unsure how to use venmo etc. My best estimate is anywhere from $20-50 a week on these items but is unwilling to pay a 223 a month premium for insurance.