Have you ever wondered why you don’t get paid daily? Why do we only get paid every 2 weeks? If I work a day, my employer should pay me for that day’s work. Am I right? I shouldn’t have to wait 2 weeks to see the money that I’ve earned.
Well, guess what? Now you can finally get paid DAILY. An app called Earnin’ came out and you can download the app by clicking on the buttons below.
- Get paid daily up to $100 each day
- No fees or interest – The company does ask for “tips”, but I’ve emailed them and they say it is not a requirement, so it’s FREE to use the system! Woohoo, free!
- If you get paid more than $100 each day, you can request an increase in the daily limit.
- The company takes the amount they paid you from your next biweekly paycheck
Why is this app useful?
1). For a lot of America who has to deal with overdraft fees, you can use this to get cash for emergencies. Instead of waiting for your biweekly paycheck to go through, you can get paid daily. Instead of borrowing money from payday loans, just get the money you deserve early.
2). If you’re paying off any type of debt, the faster you pay it off, the less interest you’ll accrue. If you can pay off your loan every day instead of just one lump sum every two weeks, you’ll save money.
3). If you’re investing, you always want your money to be put to work the soonest. Time in the market beats timing the market! Your returns will be averaged over the course of 2 weeks instead of being reliant on the last day of the 2 week period.
4). The principle of it. Why should your company hold on to money that is yours? Why shouldn’t you get paid daily? It’s not like the technology isn’t there (it is!). Just because your company’s payroll hasn’t caught up to 2018 doesn’t mean YOU shouldn’t.
The Cost – How Do They Pay For It?
The app is FREE to use, with no fees and interest. I’m always skeptical of business that are “free”. Remember, when a company is offering things for free, either you’re the product (you would not believe how much FB knows about you and how much you make them in advertising revenue), or they’re somehow making money off you in voluntary fashion.
I can see how they’d make money with this app easily though. The average person would not do a calculation on how much interest it will cost them to borrow if they leave a tip. So, I did the math for you.
Let’s say you tip $1 on the first day of your pay period each time. We’re assuming you’re taking the $100 each time at the end of the day, because they will only pay you after you’re done working for the day. The app is not lending you money you haven’t earned yet, it’s just allowing you early access to it. You’re essentially voluntarily paying a 2.3 percent interest rate IF you tip this way. What if you tipped the day prior to getting your paycheck each time? That’s a 262 percent interest rate. No, that is not a typo, that’s 262 percent.
What if you tipped $1 every day? That’s a 363 percent interest rate. Here’s a chart to explain it better. It assumes you’re taking out $100 each day with the tip being $1 if you choose to do so.
Now, are some people going to tip them $1 or more every time? Probably. Are some people who read this exact blog post with all the warnings above going to forget all about this chart and still tip them each time/once? I would not be surprised. America has a very ingrained tipping policy. Plus, humans have a fickle memory and as a society that doesn’t talk about money, the above chart might not mean all that much. But that’s how they’ll make their money.
But good thing you read this blog and have me to calculate the annual interest you’d pay if you did that! So, before you tip, know that you can just not tip and still use the service for free. Download the app by clicking on the buttons below, and get your money daily instead of biweekly now :).
As I write this post, I know there are still going to be people who forget everything that I’ve said above and tip the app for a crazy interest rate. But I’ve done my job here and can only warn so many times. I’m sure most other sites would just review the app and not even calculate the cost of interest. Just like travel hacking, if you can use it correctly, you’ll come out ahead. Hey, what’s better than getting your money early?
Days Before Payday – For example, “1” means the day prior to payday. There is no 0 days because that’s the day you get paid. The columns go 1-13 because biweekly is a 14 day period.
Interest Just for That Period – This calculates the interest just for tipping $1 X days early.
Just tipping on that day – Since this is a 14 day period, we average the annual interest rate if you’re only tipping on one day.
Multiple – Number of periods in a year for the amount of days to payday
Avg Yearly Interest – This is the cost of tipping $1 each day on an annualized interest rate
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Olivia worked in finance and wants you to learn the secrets of financial independence. She’s on track to reach financial independence before 30, and she wants to teach you how you can retire in less than a decade as well.
She thinks everyone needs an emergency savings fund and uses CIT Bank . They have the highest yielding rate at 1.55% and only require a minimum of $100. No monthly fees or charges like other big banks!
Her favorite free investment plan is from Ellevest. Go to Ellvest and click “Get Started” to get yours.
Her favorite personal finance tool is Personal Capital, which allows her to track her spending, historical net worth, and monitor her credit cards. It’s an upgraded version of Mint, in her opinon.