Financial Dignity: How Payactiv Can Help

Financial dignity is the promise of the American Dream.

It’s the promise for every worker to achieve employment and educational opportunities and an overall sense of financial security.

But for all those that have acquired this success, there have been a great many who have been left behind to struggle with debt, past-due bills, and the stress of insolvency.

One of the pillars of Payactiv’s business is to provide services to low to moderate-income employees so that they can achieve this financial dignity.

What is Financial Dignity?

Financial dignity means a person’s ability to make well-informed financial decisions that help them reach their long-term financial goals.

Successful achievement of financial dignity results in the individual feeling a sense of control, autonomy, and freedom with respect to their financial life.

Let’s break the concept down further.

Financial dignity means:

• Being able to earn your own money, pay your bills, and enjoy leisure and entertainment without being subjected to stressful and degrading situations or being unable to afford basic items.
• Earning a regular salary or wage and having enough to put aside to save or invest.
• Always having an emergency reserve fund on hand.
• Not accumulating debt and/or having difficulty accessing credit.

Once people achieve financial dignity, they’re in a position to live comfortably.

Of course, achieving financial success and dignity is something most people aspire to, but unfortunately, that doesn’t always happen. Sometimes the reason is that people earn poor wages, leaving them unable to pay for regular or unexpected expenses. Sometimes it’s simply because people don’t know how to manage their finances as well as they should.

How Does a Lack of Financial Dignity Affect People’s Lives?

When people lack financial dignity and are concerned about their finances, they’re constantly on edge and worrying. How will they pay their bills and debts? How will they cope without being able to afford basic items such as rent, food, water, and electricity?

This stress can cause effects such as:

• Low self-esteem
• Lack of concentration
• Feelings of insecurity, frustration, discouragement, and guilt
• Serious physical and mental health problems (such as high blood pressure and depression.)
• Substance abuse
• Relationship problems
• Excessive use of credit cards, payday loans, and overdrafts
• Frequent absences from their workplace
• Conflict with co-workers and management

How Financial Dignity Leads to Financial Security and Savings

Nima Abu Wardeh, in an article for The National, cites a quote from Benjamin Franklin as a summation of financial dignity.

“Let honesty and industry be thy constant companions and spend one penny less than thy clear gains; then shall thy pocket begin to thrive; creditors will not insult, nor want oppress, nor hungerness bite, nor nakedness freeze thee.”

This quote comes from a series of miscellaneous aphorisms on political economy that was compiled in various Franklin memoirs from the late 1700s well into the following century.

And though the language may seem archaic in a modern-day economy dominated by more contemporary issues such as wealth inequality, the rise of technology, and diminishing employee financial security, the root meaning is still valuable to us today.

A worker with the means to access their income, be prepared for unexpected financial obligations, and save what they earn, will ultimately achieve financial dignity. Once that financial dignity is maintained, a worker can look forward to securing even greater financial security.

And the list of financial issues Franklin referenced still has relevance to workers today:

• “Creditors will not insult” means an end to a reliance on predatory payday loans and obscene interest rates.
• “Nor want oppress” means you’ll be prepared for your upcoming financial obligations or spend your earnings on anything from a birthday gift to a vacation with your family.
• “Hungerness bite, nor nakedness freeze thee” means you’ll have the resources necessary to provide basic necessities such as food and shelter for yourself or your family.

Financial dignity is a concept whereby an employee can protect their interests in the workplace while also remaining private about their finances. When an employee can more acutely understand how their finances work, they’re better prepared to manage and navigate their financial life.

“Financial dignity boils down to the controlled use of all the money that you have in your life with the aim of achieving the life and lifestyle that you want for yourself,” Wardeh maintains in her article.

How Employers Can Help Employees Gain Financial Dignity and Meet Their Financial Goals

Offer Financial Education Tools

Employer-sponsored financial education and financial literacy initiatives can help to avoid people encountering these problems.

Work with your employees to help them with their finances beyond their paycheck. Through a combination of tools, apps, classes, and resources, you can help your employees level up their finances and achieve a new level of financial security they only dream about today.

Introduce Earned Wage Access

In recent years, a new on-demand payment alternative has emerged that increases the financial control of employees: Earned Wage Access (EWA).

With this model, employees don’t need to wait for a fixed payment date to receive their wages. They can withdraw the value of the days they’ve already worked during the month at any time. With the best EWA providers, it’s quick and easy for employees to request funds using an app on their smartphone. The money gets transferred into their account immediately.

EWA helps people more accurately plan for the payment of their expenses (both regular and unexpected.) They’re also less at risk of running out of cash by the due dates of their accounts or having to turn to high-cost payday lenders or overdraft facilities.

Empowering Employees to Succeed

Empowering employees to control their finances is a benefit that is far-reaching in its scope.

“Financial dignity is closer to what I call the ‘universal language of money’ that the whole world actually speaks,” wrote John Hope Bryant, a philanthropic entrepreneur, in an article about teaching financial literacy to the young generation whose future will be complicated by issues of inequality and money management.

Employees invest time, effort, and labor in their employer. When a company invests in the dignity and productivity of its employees, they’re investing in the greater success of its business.

How Payactiv Can Help

Payactiv is the mechanism by which an employee can pursue and achieve financial dignity and all the benefits that accompany it. We make it easy for you to help your employees access, plan, spend, and save to live today with dignity while building financial security and savings for tomorrow.

The Payactiv savings tool allows an employee to track their paychecks and savings over time. When money can be monitored and put aside, an employee can eventually afford to provide better benefits and security for themselves or their family.

Employees with access to their own money – on their own schedule – can save significantly. Avoiding fees, interest, penalties, and payday loans increases their take-home pay by an average of 10%.

Learn more about Payactiv’s Service, or book your demo now.