This service offered by payroll providers may not be the best option.
- I have the choice to claim my paychecks early.
- I decided against it because paying early will not help my long-term financial situation.
- When you prioritize saving for emergencies, it’s possible to get out of the paycheck-to-paycheck cycle.
My payroll service offers a unique feature: early pay. Essentially, I have the ability to access my paycheck ahead of the normal scheduled date that my money would normally come to me.
While this might seem like a nice way to get early access to my funds, I’ve decided not to use it. Here’s why.
Getting my paycheck two days early would not change my financial situation
The main reason I chose not to receive my paycheck before the regular deadline is that it won’t really change my financial situation or give me any extra money.
Early payment services are generally touted by payroll services, who offer them as an alternative to payday loans or as a way to cover unexpected expenses without borrowing. However, what’s happening in general, according to the National Consumer Law Center, is that people tend to rely on getting their money early, every time. Once they get their early paycheck, the money doesn’t last until their regular payday, so they end up getting their money early every time.
Well, that probably won’t happen to me because I’m not living paycheck to paycheck. But since I don’t want to get caught in a cycle of relying on early access to my money to pay my bills, I never want to start down that path. I don’t want to spend money until I’ve actually earned it, even if it’s my own money, because that would make my life harder down the road — and increase the likelihood that I’d have to borrow more in the future.
Should You Get Your Paycheck Early?
When you live paycheck to paycheck, early access to your money can seem like a lifesaver — especially when you have bills due before your regular paycheck arrives.
But rather than relying on access to this service as a temporary fix likely to make financial problems worse in the long run, it’s better to break the paycheck-to-paycheck cycle entirely.
You can do this by prioritizing emergency savings and creating a budget that allows you to spend less than you earn each payment cycle. This may mean making some cuts on things you’re currently spending on — especially if you’re working to build your emergency fund. Or it can mean that you are looking for ways to increase your income, e.g. B. by working more hours and/or taking on a part-time job.
But once you’re able to save money for emergencies and make sure you have money left over when your next paycheck comes, you don’t have to worry as much about your financial situation — and you do Don’t rely on services like early access to paychecks that don’t help you improve your overall financial security.
If you haven’t built up an emergency fund yet and need to use this service, it can be better than other forms of borrowing, depending on the terms. But make sure you understand what you’re committing to and vow not to make early access to your paychecks a habit.
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