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this post was submitted on 20 Aug 2023
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Asklemmy
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What's the better alternative and why is that a scam?
I don't know if it's so much a scam as it is banks and companies and such being stuck in the past.
You could be getting paid every week or even every day, it's your money, you already earned it, why should you have to wait for it?
Especially in this day and age where everything is computerized. You punch in, you punch out, the computer knows how long you worked, somewhere in their payroll system they know how much you earned, what needs to be withheld, etc. It takes fractions of a second for a computer to do that math, they could send that transaction the moment you clock out.
When things were more manual, it made sense, you had to have someone adding things up, and doing math, computers were bigger, slower, less user friendly, more expensive, and not all hooked up to the Internet up to the Internet to talk to each other. It used to make a lot of sense to do things in big batches at the end of the day, every week, every 2 weeks, 2 or 3 times a month, whatever.
But now you could put in your 8 hours work, and walk out with your days wages already in your account ready to be used for whatever you need it for immediately, no more being broke until payday, payday is every day. But that's not how it works because as far as the banks and such are concerned everything is working fine for them, so no real need to update their shit.
Couldn't this be switched around too? I'm only paying some of my bills every other month or twice a year. Why shouldn't I be paying those off every week or even every day?
It absolutely could, everyone manages their money in their own way. If that's something that works for people I think they should have that option.
Personally when possible, I do like to do things that way. If I owe, say, $100/month on my car payment, I will tend to pay $50 with each paycheck instead of $100 once a month, and if I got paid every week, I would probably choose to pay $25 a week instead. For me and how my brain is wired, it's just easier for me to mentally keep track of things when they're in smaller, more frequent increments. I don't know if I would quite break it down to ~$5 a day if I got paid every day, but i'd consider it.
Paying on your mortgage every week can drastically reduce your interest, depending on how your interest is calculated. Even if you pay the same amount at you would per month, paying it every week could save thousands of dollars.
Wait what??? Explain this like I'm an idiot.
There's next to no difference in regards to payroll processing on a week by week basis. Companies want to push this to a fortnight or month so it's easier on their finances. There's very little reason it couldn't be paid weekly.
You're still getting the exact same amount of money so how's that a scam?
Technically every day you are not paid is an interest rate free loan to your employer. That said, being paid once a month is fine for me since all my fixed expenses are also paid on a monthly basis.
The employer basically gets an interest-free loan for that extra week; whereas the employee might need to pay interest to a third party to make up for any shortfall on their end (e.g. credit cards, payday loans). Majority of people live paycheck-to-paycheck and can't cover an unexpected $1000 expense.
The interest-free loan part I get but I don't see how getting paid every week would help you deal with the unexpected $1000 expense. To me this just sounds more like being bad at dealing with personal finances than anything granted I'm in a privileged place since I don't live paycheck-to-paycheck
It's not going to help much with the unexpected $1000 expense, but it would help with the smaller expenses and general day-to-day life. If you've never had to utter the phrase "sorry, but I don't get paid until next week" it's probably hard for you to understand, but many of us had to miss out on some little things in life we needed or wanted because the money we had already earned wasn't available to us when we needed it.
But you're not getting any less money. If you can't afford something when you're getting paid once a month then you can't afford it if you're getting paid every day either.
This still sounds more like an issue with managing personal finances than anything.