Blog | December 30, 2019 | Last Updated: Mar 6, 2025 | 2 minutes read
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 Financial Dignity Impacts Workplace Performance and Productivity
Work performance refers to how well an employee completes their tasks – the quality of outputs. Workplace productivity, on the other hand, is a measure of the quantity of their outputs. When your workers are under financial stress, both performance and productivity may decline.
Constant worry about money can distract workers, leading to elevated stress levels which can result in fatigue, difficulty concentrating, or irritability. Stress can also impair employees’ decision-making, resulting in errors or incomplete assignments. These issues not only affect their job performance but also their long-term well-being.
Financial stress often leads to increased absenteeism, as workers feel overwhelmed or experience sleep problems. This can result in them taking more sick leave.
The Importance of Financial Wellness for Employee Retention
Financially stressed employees are more likely to leave their jobs. That turnover can be costly for businesses, both in terms of recruitment expenses and lost institutional knowledge.
Forward-looking employers understand that prioritizing employee financial wellness and economic empowerment could be the difference between keeping or losing high quality team members. As such, they’re crafting work environments that support people’s financial dignity and well-being by reducing stress and improving their overall health.
Key Financial Tools to Help Employees Achieve Financial Dignity
Financial Education and Financial Literacy Initiatives
Employer-sponsored financial education and financial literacy initiatives can help to avoid people encountering these problems and promote a culture of financial inclusion and economic stability within your workplace.
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.
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.
Real-World Examples of Financial Dignity Programs in Action
Success Story: JAE Combats High Turnover with On-Demand Pay
JAE restaurant’s employees get paid biweekly, but because they offer Earned Wage Access through Payactiv, their employees can now access their money whenever they need it. Since implementing Payactiv, JAE has seen a significant increase in employee retention and estimates that about 50% of the users are staying longer.
The number of active users continues to grow, but so far, the most popular feature has been Instant Deposit, allowing their employees instant access to their wages.
Revolve is an online retailer of over 500 brands of top designer apparel, shoes and accessories. One of its challenges was retaining trained employees longer and relieving the financial stress they sometimes face while waiting for the next paycheck. By introducing Payactiv, Revolve was able to:
Offer financial relief to employees between paychecks.
Spend less time processing requests for pay advances.
Retain current employees longer.
“I would say this is one of the best things you can provide for your employees. You gain your employees’ trust and loyalty…employees are in control 100% and it is confidential.”
– Lauren Mehta, Payroll and Benefits Supervisor for Revolve
How Payactiv Can Help You Build Your Employees’ Financial Independence
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%.
Understand how thousands of companies have improved their employees’ financial dignity and boosted retention, recruitment, and engagement by offering Payactiv. Learn more about Payactiv’s Service, or book your demo now.
