According to a 2023 Financial Wellbeing in the Workplace report, 85% of employees feel financially stressed – and this is true across all income levels, ages, demographics, and industries. Unfortunately, there is no reason to expect these sky-high rates of financial stress to taper off anytime soon.
Financially strapped Americans are vulnerable to any unexpected expenditure between traditional pay cycles – and sometimes struggle with routine expenses, such as groceries, too.
While there isn’t one solution that will ease Americans’ financial stress, there are some tools that can help employees feel more financially secure, including earned wage access, an instant payment option that provides workers daily, weekly or on-demand access to their income.
Here are three ways earned wage access can ease financial stress and benefit workers:
Allows workers to access their income to pay bills or cover emergencies
Research has shown that almost half of the workforce would have difficulty paying an unexpected expense of $400 and that financial challenges cause the most stress in an employee’s life. Earlier and more predictable access to earned funds allows workers to deal with unexpected expenses, such as doctor visits or vehicle repairs, without breaking into savings or using credit.
Helps empower workers to manage their budgets better
Americans are worried about their finances. In fact, 73% of Americans cited their finances as the largest stress in their life in a recent survey. With 60% of Americans living paycheck to paycheck, this is understandable. Earned wage access allows workers to better monitor their personal cash flow and improve their budgeting. This enhanced clarity can relieve financial stress and empower workers to make more informed financial decisions. Ultimately, it can also help workers make better long-term financial decisions.
Prevents the use of predatory payday loansÂ
Earned wage access allows workers, particularly the underbanked, with short-term cash needs to meet unexpected financial needs without falling prey to predatory payday lenders. Avoiding these exploitative alternatives saves workers money and protects them from the ongoing debt cycle created by payday loans.
Today, 10% of companies, including mega employers such as Walmart and McDonald’s, as well as the gig economy companies Uber and Grubhub, have adopted EWA programs. Each day, more businesses across the U.S. are working with payroll firms to offer earned wage access via real-time payments to help employees reduce financial stress. Employers interested in assessing and comparing their options can find more information by contacting their financial institution or payroll provider.
