Courtesy of Even.com
Meet Even – “the bank app that plans, so you don’t have to.”
According to its developers and founders this platform is a new hope for the majority of people who live from paycheck to paycheck.
To think about it, their target audience is really huge – according to the data about 70% of Americans actually live like this.
The idea behind the application is to provide people with the access to their honestly earned cash at the time when they actually need it, not just at fixed salary dates.
The company’s CEO Jon Schlossberg explained why it is important – the app gives more freedom as well as saves from forced and frequently unfavorable financial decisions.
When you have to count days till your paycheck, and you need money now (for any emergency expense), you are more likely to resort to literary any option, high-interest loans and pawn shop services included. Late fees are a common story and overdrafts are a nightmare. These are the consequences of low income, for sure, also mismanagement, undoubtedly; but it is also the problem of a paycheck-to-paycheck living situation.
Thus, Even is meant to deal with that. The platform can serve both workers – on fixed salary and hourly-paid. It will allow receiving at least half of the paycheck as soon as this amount is earned – once a pay period.
What Is It?
Even is a finance management tool. It has been developed with the assistance of the Stanford University researchers and the Consumer Financial Protection Bureau (CFPB) and is specifically meant to help people to deal with their earnings wiser.
The app teaches to plan and stick to the limits – one can only have one pay advance in a pay period. It doesn’t seem to help when more frequent payments are allowed – not from the point of view of financial situation improvement and wiser decision-making. Too frequent payments are able to make the situation worse.
Only half of the earned amount is accessible at a pay period. Which is usually quite enough since diapers and school supplies (that often cost no more than $50) are most common things that cause a problem (according to the research data.) Such small cash injections form the future earnings represent much safer and less riskier option than applying for cash advances from third parties (where you are bound to repay with interest included.)
Right now Even does not provide opportunities for large money injections as it goes against this product’s main purpose – to solve financial issues (allowing large withdrawals at any time is unlikely to improve anyone’s situation.)
It may seem strange to introduce such a clever tool and set it up with very strong limitations; however, there is a lot of sense in making people learn more about their money, how they actually spend, and how they can plan better, if they want to.
The idea is to teach – and also to demonstrate not just Instapay‘s potential but how all such services in general and the ones of Even’s in particular can make a difference to a person’s financial situation.
Pretty often people who live from paycheck to paycheck don’t really have time to realize how their money come and go: by the time they get their salary, the list of expenses is too huge, too may items to cover – very little is left, again. Getting information about the cash flow is a key to change some habits, a key to better financial management.
Even is a complicated tool – it took developers three years to create it. Now it allows a user to connect their bank account to the app and have all the income and expense information processed. They get individual recommendation on personal finance management – which sounds really promising.
Will It Work?
The idea is great, especially if you take the number of people they strive to help. However, as in any startup, there are still many issues to resolve.
One of the next goals is the provision of larger pay advances (>50% of a paycheck.) And by the description of it, these larger advance option might be a good alternative to payday loans. At least, the company’s CEO hopes, it will be a better option.
The company also plans to provide its users with an easier access to both automated budgeting tools and Instapay in combination and they hope to achieve even better results.
At the present moment Even is being tested by a great number of Walmart workers, and it is expected that many more will sign up and use it in the nearest future, so, we are likely to see some feedback and results pretty soon.