Author Topic: PayActiv?  (Read 869 times)

Pizzabrewer

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PayActiv?
« on: October 12, 2017, 04:41:47 AM »
At my workplace we are paid weekly, on Friday. The company just started offering PayActiv which is "a voluntary employee benefit that provides you instant access to your earned but unpaid income"

No interest is charged for this "advance" but there is a $5 fee each time you do it.

I guess people are so on-the-edge financially that they'll pay $5 to get their money a few days early???
« Last Edit: October 12, 2017, 04:46:00 AM by Pizzabrewer »

Kimera757

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Re: PayActiv?
« Reply #1 on: October 13, 2017, 06:06:37 PM »
I'm honestly surprised there isn't more reaction to this post. Probably because it's useful if some emergency happens and a non-Mustachian need an occasional advance for $5. Dumb to pay $5 every paycheque, but lots of people pay similar fees at cheque-cashing places, prepaid cards, etc... and not as dumb as a payday loan.

Travis

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Re: PayActiv?
« Reply #2 on: October 13, 2017, 06:21:03 PM »
While the concept is anti-mustachian and is a sign you just suck with money, that's a much better deal than going to a payday loan business.
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MrsPete

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Re: PayActiv?
« Reply #3 on: October 15, 2017, 12:46:51 PM »
It's also no different from people paying a fee to withdraw money at another bank's ATM. 

Years ago I worked part-time at a small construction company, and one of my tasks was payroll.  I'd take down the numbers from the site managers and send the information to corporate.  Every Thursday I received a FedEx package containing the paychecks, and the site managers came into the office to pick up their crew's checks on Friday.  I kept the checks in a safe and was forbidden to give out a check early -- except for the occasional oddity, which was approved by the big boss. 

Except for one check.  My immediate supervisor's check.  On Thursdays she'd hound me relentlessly:  Is the package here yet?  Yet?  Yet?  Still not yet?  As soon as the package arrived, she'd take her check (and her husband's check) and go straight to the bank -- she'd already have checks written against her weekly paycheck.  If the package came at 10:00 am, she took an early lunch.  If the package came late in the day, she'd wait for her lunch.  Sometimes she "lost" at this game and bounced checks, which we all know is terribly expensive. 

I was a college student living on pennies, worried every single semester HOW I was going to pay tuition and pay for books ... but I was managing my money better than she was. 

Laura33

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Re: PayActiv?
« Reply #4 on: October 17, 2017, 08:03:01 AM »
It's also no different from people paying a fee to withdraw money at another bank's ATM. 

Years ago I worked part-time at a small construction company, and one of my tasks was payroll.  I'd take down the numbers from the site managers and send the information to corporate.  Every Thursday I received a FedEx package containing the paychecks, and the site managers came into the office to pick up their crew's checks on Friday.  I kept the checks in a safe and was forbidden to give out a check early -- except for the occasional oddity, which was approved by the big boss. 

Except for one check.  My immediate supervisor's check.  On Thursdays she'd hound me relentlessly:  Is the package here yet?  Yet?  Yet?  Still not yet?  As soon as the package arrived, she'd take her check (and her husband's check) and go straight to the bank -- she'd already have checks written against her weekly paycheck.  If the package came at 10:00 am, she took an early lunch.  If the package came late in the day, she'd wait for her lunch.  Sometimes she "lost" at this game and bounced checks, which we all know is terribly expensive. 

I was a college student living on pennies, worried every single semester HOW I was going to pay tuition and pay for books ... but I was managing my money better than she was.

Yep.  My DH was a fab manager at a site when there was a screwup with paychecks and they were going to take an extra 2-3 days to get them there.  He had several people at his door asking him how the heck they were supposed to make it for that extra time.  These were people making $60-100K, too.  Floored me. 

Given the general level of financial stupidity out there, I feel like I almost have to applaud this company.  There are so many payday lenders and title loans (a/k/a legalized loan sharks) out there, looking to take advantage of people like my DH's former employees.  At least this provides a non-usurious alternative for the financially stupid.
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slugline

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Re: PayActiv?
« Reply #5 on: October 17, 2017, 08:57:56 AM »
If the alternative is the payday loan industry, then I can already see this being a win-win for both employers and employees. Yep, the bar is set that low for some folks.

londonstache

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Re: PayActiv?
« Reply #6 on: October 17, 2017, 10:02:59 AM »
Working in HR I'd be amazed if there wasn't massive uptake on this offer from people, and eventually some employees who utilise it every week.

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Re: PayActiv?
« Reply #7 on: October 17, 2017, 10:46:55 AM »
If the alternative is the payday loan industry, then I can already see this being a win-win for both employers and employees. Yep, the bar is set that low for some folks.

The payday loan industry is *an* alternative. But then again, so are budgeting, stashing the cash and avoiding unnecessary purchases until there are sufficient cash reserves to cover an emergency, and limiting one's consumption so that there is a sizable margin between spending and earning.

The reason the bar is set low is because people don't get called on their fallacious reasoning often enough. There are entire categories of fallacious, sloppy thinking that lead to this kind of behavior. Two in particular come to my mind today:

(1) The "false dilemma" in which a person is forced to choose between two things as though they are the only option. The fallacy of the excluded middle, for example ("the answer must be black or white, there's no such thing as gray") excludes moderation and middle-of-the-road type options because only the extremes are valid.

(2) The "fallacy of relative privation" argument, which I think is more appropriate to the PayActiv versus payday loan debate, revolves around ("A is not as bad as B"), dismissing the problems with PayActiv simply because a worse option exists. By doing so, an arguer neatly sidesteps the question of whether there are better ways to solve the problem of not having enough money at the end of the pay period.

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MrsPete

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Re: PayActiv?
« Reply #8 on: October 17, 2017, 11:49:49 AM »
Yep, the bar is set that low for some folks.
when I worked at that same place -- the small construction company -- the general feeling amongst the employees (office staff and work crews) was that you SHOULD spend every dime you had before your next paycheck arrived.  It was almost as if they believed they wouldn't be allowed another paycheck if they hadn't completely utilized their last one.  I remember a conversation with my immediate supervisor (the one who always wrote checks against her paycheck before even receiving it) in which she talked about her son (who was in the military) buying an expensive sports car.  She said she entirely approved of the purchase; she said she told him he SHOULD spend his money on something fun and frivolous now -- before he grew older, settled down and had bills to pay.  I asked her if it wasn't wise to save from a young age, build a nest egg against the day he'd leave the military and want to buy a house -- she looked at me like I had two heads.  Why would you save BEFORE you were ready to make a purchase? 

The reason the bar is set low is because people don't get called on their fallacious reasoning often enough.
Disagree.  I know people who run short each and every payday -- and those same people find themselves in full-on crisis mode because of things that should be expected:  The car needs new tires, the toddler had to go to the emergency room.  Thing is, some people go through these things ALL THE TIME, yet they don't change their habits.  I think the real issue is, The penalty for lack of preparedness is not high enough to bother them. So I had to get a payday loan; it's not like that interest would've allowed me to retire anyway.  So I had to ask my mother for money for the kids to have winter coats; she grumbled, but she gave it to me.  Somehow, some way they make it through -- yet it doesn't bother them enough to change their habits. 

The other thing is that a lot of people really don't "make a connection" between their spending and their financial security.  It's crazy, but a lot of my low-academic students don't "make a connection" between attending school /studying /taking notes and their grades.  They seem to think that passing or failing is just kind of something that happens.  Some people have all the luck, and they always pass -- not me; I fail sometimes -- no, it couldn't be connected to my 16 absences and never taking home books.  It's cause Mr. Jones hates me.  I think these people grow up to think the same way about money. 

(1) The "false dilemma" in which a person is forced to choose between two things as though they are the only option. The fallacy of the excluded middle, for example ("the answer must be black or white, there's no such thing as gray") excludes moderation and middle-of-the-road type options because only the extremes are valid.
I've heard that called Fallacy of Forced Choice.  Teenagers love this in the classroom:  If you don't extend the deadline for the paper, I will not graduate.  No, if you do all the rest of the work, this missed paper will hurt you grade but not keep you from passing ... much less graduating.
« Last Edit: October 17, 2017, 11:54:24 AM by MrsPete »

Pizzabrewer

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Re: PayActiv?
« Reply #9 on: October 17, 2017, 12:30:24 PM »
Quote
Given the general level of financial stupidity out there, I feel like I almost have to applaud this company.  There are so many payday lenders and title loans (a/k/a legalized loan sharks) out there, looking to take advantage of people like my DH's former employees.  At least this provides a non-usurious alternative for the financially stupid.

Yes, but.  We're paid every Friday.  So at best, for your $5 you get your money 4 days earlier?? 

I did have one co-worker ask me if I knew what time our pay was credited to our bank accounts.  I said I didn't know, that every time I woke up on Friday morning and checked my bank account on line it was there.  He asked "what time do you wake up?".  I jokingly said, "what, are you waiting by your bank's ATM early Friday morning?".  Then I realized he probably was.
« Last Edit: October 17, 2017, 12:32:30 PM by Pizzabrewer »

TheGrimSqueaker

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Re: PayActiv?
« Reply #10 on: October 17, 2017, 01:15:04 PM »
(1) The "false dilemma" in which a person is forced to choose between two things as though they are the only option. The fallacy of the excluded middle, for example ("the answer must be black or white, there's no such thing as gray") excludes moderation and middle-of-the-road type options because only the extremes are valid.
I've heard that called Fallacy of Forced Choice.  Teenagers love this in the classroom:  If you don't extend the deadline for the paper, I will not graduate.  No, if you do all the rest of the work, this missed paper will hurt you grade but not keep you from passing ... much less graduating.

That's another good term for it. Have you noticed how it tends to come *after* weeks or even months of ignoring opportunities to do things that result in a passing grade?

Your insights about the psychology behind managing in crisis mode sound very rational and are probably correct. People won't snap out of it until they become uncomfortable enough to make some changes. It's generally easier to push the pain and discomfort off onto other people. This eventually destroys the relationship, but it doesn't matter because there are always more do-gooders.

For example, the grandparent who is asked to pay for winter coats for the kids is "grumpy" and "grumbling" because in order to say yes to the wheedling adult child they must make cutbacks elsewhere. To compensate for the adult child's decision to blow money on booze and smokes, the grandparent puts off paying for medication or repairs to the family home. The irresponsible young "adult" of course doesn't care what happens to the parent or grandparent, because they got to do what they wanted with their money at the time (par-TAAYYY) and *still* were able to get their needs met, so everything is great. Nor does the young "adult" recognize that continued trips to the well eventually cause the well to run dry.
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