Author Topic: The solution to payday lenders  (Read 3114 times)

freya

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The solution to payday lenders
« on: November 13, 2019, 10:37:11 AM »
....is apparently for you to not have to wait the 2 weeks for your next paycheck!  Because, you know, no one out there could possibly have a 2 week emergency fund available, right?

https://www.cnn.com/2019/11/13/economy/instant-access-pay-employees/index.html

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The majority of Americans live paycheck to paycheck, and getting paid every two weeks can lead to problems when unexpected bills show up. But help is now on the way.

Help?  What kind of help?  How about this for an alternative, CNN?

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Except when you come in and actually ask for a loan, I PUNCH YOU IN THE FACE AND TELL YOU TO WISE THE FUCK UP AND GO SELL SOME OF YOUR SHIT INSTEAD OF BORROWING MORE MONEY!

To be fair...would be nice to get your money sooner so it can start earning interest for you instead of your employer.  But that's not the point of the article.

Daisyedwards800

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Re: The solution to payday lenders
« Reply #1 on: November 13, 2019, 11:09:04 AM »
This would be really bad for the paycheck to paycheck crowd.  But good for me!

Wrenchturner

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Re: The solution to payday lenders
« Reply #2 on: November 13, 2019, 01:03:58 PM »
An unexpected bill that's less than a paycheck amount shouldn't be an emergency.  That is, if you have a crisis that can be solved with a day's wages, if only you could access it, should not be a crisis.

Remarkable considering how many farmers basically live on zero income for months, and have done so for generations.

NorCal

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Re: The solution to payday lenders
« Reply #3 on: November 13, 2019, 02:32:40 PM »
If someone can't manage their money to a two week pay cycle, I have 100% confidence that they won't be able to manage their money to a daily pay cycle.

I wouldn't want daily pay anyways.  The added interest on a daily pay is barely above zero, and then I'd have to include daily income transactions into my tracking spreadsheet.  No thank you!

That being said, I fully support the move to real-time-clearing in ACH transactions.  Not having to manage payments around 2-3 day transfer times would be a huge plus.

BFive55

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Re: The solution to payday lenders
« Reply #4 on: November 13, 2019, 02:48:12 PM »
With pay being automated nowadays at many places I don't see the issue with weekly paychecks. One place I worked did that.

A lot of people live paycheck to paycheck. One person I know had a large family, and while he saved money, and worked a lot, it was still hard. Having kids is expensive, as is a high cost of living area. And the person is not super spendy either.

Sometimes it gets tough. It's easy to just say these people have poor spending habits. It's like claiming a 40 year old making $10/hour should "just get a better job" and it stereotypes those people as just lazy and/or too uneducated without addressing the issue of why they have a $10/hour job and no health care or can't pay bills.

ysette9

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Re: The solution to payday lenders
« Reply #5 on: November 13, 2019, 03:06:15 PM »
I have changed my perspective a bit on payday lenders and how poor people in general navigate financial institutions after watching our former nanny. She and her husband are recent immigrants with three kids who came here on a green card lottery with little. They work three jobs between the two of them and live in a one-bedroom apartment for all five people. Thy certainly arenít doesnít but they continually have challenges of people who live on the edge. Things like not being able to float the irrational and unreasonable multiple day wait between depositing a check and having the funds available. Or the wait between an automatic transfer from me to her being anything but fast. I donít care if it takes days for my paycheck to post but when their rent is due, had stop, they donít have that luxury because they donít have thousands extra in the checking account. That is where payday lenders and cash checkers and stuff come in. You need access to your money right away without bank fees and incomprehensible wait times and ambiguity? They will do that. The banking system in the US really needs to improve to better serve those living at the edge.

TheGrimSqueaker

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Re: The solution to payday lenders
« Reply #6 on: November 13, 2019, 03:16:54 PM »
With pay being automated nowadays at many places I don't see the issue with weekly paychecks. One place I worked did that.

A lot of people live paycheck to paycheck. One person I know had a large family, and while he saved money, and worked a lot, it was still hard. Having kids is expensive, as is a high cost of living area. And the person is not super spendy either.

Sometimes it gets tough. It's easy to just say these people have poor spending habits. It's like claiming a 40 year old making $10/hour should "just get a better job" and it stereotypes those people as just lazy and/or too uneducated without addressing the issue of why they have a $10/hour job and no health care or can't pay bills.

Generally the simplistic solutions of "earn more" and "spend less" are easier in theory than they are in practice. Where a person starts out privilege-wise has an impact on how much of the things that happen to them depend on their choices versus how much of their experience is affected by the people and the economic conditions around them. The more privilege you have, the more autonomy you get and the less your hard work can be undone by the people around you.

Poverty sucks, and not just figuratively. In a lot of ways it behaves like a mass large enough to create its own gravity: the farther away from it you are, the less it affects you: you need less of an escape velocity to get free of it and you can direct more of your fuel or propulsion resources to changing your direction and moving toward your destination. When it comes to propulsion and fuel there are varying levels of capability and work ethic between individuals, but if you launch a rocket from a planetary surface most of the fuel is expended just getting out of the atmosphere. I'd venture to say that poverty is more like a black hole with a distinct event horizon. How far away you are from that event horizon influences the consequences of your decision making. The closer you are, the more negative consequences you experience as a result of bad decision making and the harder it is to recover from a mistake. Cross the event horizon, and there's no getting out.

RetiredAt63

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Re: The solution to payday lenders
« Reply #7 on: November 14, 2019, 06:52:13 AM »
A bit OT here but my direct deposit pay (and now pension) are immediate.  You mean they aren't there?

Ysette9, would you have been able to do a direct transfer to your nanny's bank account? And would it have gone through immediately?

freya

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Re: The solution to payday lenders
« Reply #8 on: November 14, 2019, 07:34:05 AM »
Don't think they're talking about poverty here.  "Most Americans" are not impoverished.  And no one forced the family of five in the story above to leave their home country.  Since they apparently believe they are better off living in the US, they may not consider themselves impoverished.

Living paycheck to paycheck can happen at virtually any wage level.  I recently read Andrew Sorkin's book about the 2008 financial crisis, and there was a story in there about one of the Goldman Sachs co-presidents.  He earned a large number of million dollars a year, but was in financial difficulties and ended up needing to borrow money from the firm.   There was also a description of the lifestyle of some of the Lehman executives, who also were spending pretty much their entire take-home pay.

Aminul

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Re: The solution to payday lenders
« Reply #9 on: November 14, 2019, 08:21:59 AM »
I get the point of the post -- we shouldn't need to pull our cash daily.  But the idea of having an ad hoc payday is interesting.  Why couldn't employees just have an account/bucket of funds from their employer that they could access whenever they want?  Maybe I want my payday to be daily, but maybe monthly works better.  Or maybe I want to suck my money out only twice a year because my SO's wages cover expenses and I can't spend what I can't see.  Bring on the flexibility and choice.

SunnyDays

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Re: The solution to payday lenders
« Reply #10 on: November 14, 2019, 10:03:45 AM »
I get the point of the post -- we shouldn't need to pull our cash daily.  But the idea of having an ad hoc payday is interesting.  Why couldn't employees just have an account/bucket of funds from their employer that they could access whenever they want?  Maybe I want my payday to be daily, but maybe monthly works better.  Or maybe I want to suck my money out only twice a year because my SO's wages cover expenses and I can't spend what I can't see.  Bring on the flexibility and choice.

Nice in theory, but I wouldn't want to be THAT payroll clerk!

ysette9

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Re: The solution to payday lenders
« Reply #11 on: November 14, 2019, 10:42:08 AM »
A bit OT here but my direct deposit pay (and now pension) are immediate.  You mean they aren't there?

Ysette9, would you have been able to do a direct transfer to your nanny's bank account? And would it have gone through immediately?
I did an automatic bill pay to her twice a month and that took several days to process. Same with writing her a check.
In the end I was able to set it up so I could hook her account to mine and I could push money to her directly, but I could only set that up by calling my bank and asking; it wasnít available to do online and in fact want even listed as an option available.

RetiredAt63

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Re: The solution to payday lenders
« Reply #12 on: November 14, 2019, 03:42:13 PM »
A bit OT here but my direct deposit pay (and now pension) are immediate.  You mean they aren't there?

Ysette9, would you have been able to do a direct transfer to your nanny's bank account? And would it have gone through immediately?
I did an automatic bill pay to her twice a month and that took several days to process. Same with writing her a check.
In the end I was able to set it up so I could hook her account to mine and I could push money to her directly, but I could only set that up by calling my bank and asking; it wasnít available to do online and in fact want even listed as an option available.

Thanks for replying.

Your bank sure didn't want money leaving your account, eh?     /s

Just Joe

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Re: The solution to payday lenders
« Reply #13 on: November 22, 2019, 09:48:56 AM »
A bit OT here but my direct deposit pay (and now pension) are immediate.  You mean they aren't there?

Ysette9, would you have been able to do a direct transfer to your nanny's bank account? And would it have gone through immediately?
I did an automatic bill pay to her twice a month and that took several days to process. Same with writing her a check.
In the end I was able to set it up so I could hook her account to mine and I could push money to her directly, but I could only set that up by calling my bank and asking; it wasnít available to do online and in fact want even listed as an option available.

I genuinely don't know: is there a reason not to do something like Venmo? Might get the money into someone's hands quicker if all the payroll rules are satisfied.

KodeBlue

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Re: The solution to payday lenders
« Reply #14 on: November 22, 2019, 01:51:25 PM »
My first part time job as a teenager, at a Woolworth's, paid every week. We actually got paid in cash- a little envelope with a hand written pay stub attached. Even the adult full time employees got paid that way.

moof

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Re: The solution to payday lenders
« Reply #15 on: November 22, 2019, 05:25:12 PM »
It would be handy if it was easier to line up paychecks with bills.  The whole 12 bills vs 26 paychecks leads to some stupidity on my part.  When I made/saved much less I was pretty happy keeping a ~2-3k minimum balance in checking (witth 2-3k more in savings).  Now with much more money sloshing around I don't feel comfortable siphoning off the extra until it is solidly over $10k and I have double checked when the mortgage, taxable, 529, and credit card will all be withdrawn (very first world problem).
So a system that spread out predictable things like pay and recurring bills would be of some value to me mentally.