When faced with unforeseen expenses, avoid interest debt at all cost
What do you do when you have an unexpected expense and don’t have enough in savings?
So if a good 40% of Americans can’t come up with a small amount for an unexpected expense, how can we expect them to have an emergency fund or any savings for retirement?
This leads to the follow-up question: Where do individuals get money when faced with an unforeseen expense such as a car incident or medical bill?
If an individual doesn’t have enough in their savings or checking account, they are more than likely to cover this expense by borrowing money from somewhere else and incurring some sort of debt. Whether that be:
- Family & friends
- Credit Card
- Payday loan
Most of the time, any of these options will require you to pay some interest unless we are talking about option one. And you happen to have an incredible family member/friend who lets you only pay the original amount. However, for the rest of us who don’t have that, we will procure the cash needed as a debt instrument with some interest.
Don't acquire more debt with interest.
But what if there was a better solution that didn’t require you to pay for high-interest rates? In fact, you won’t have to acquire more debt and instead be able to access your money as you earn it. Are you familiar with Earned Wage Access (EWA)?
Pronto Pay's software allows employees to gain access to their wages as they are earned. Now, you don't have to take on more high-interest debt since with easier access to your earned income. To learn more about how it works, click here.
And if your employer doesn’t offer Earned Wage Access as a benefit, we would love to hear from you! We are actively onboarding new businesses across the state of Texas.
 A. Nova, "Many Americans who can’t afford a $400 emergency blame debt," CNBC, 2019. [Online]. Available: https://www.cnbc.com/2019/07/20/heres-why-so-many-americans-cant-handle-a-400-unexpected-expense.html.
 M. Leonhardt, "Payday loans can have interest rates over 600%—here’s the typical rate in every U.S. state," Make IT CNBC, 2021. [Online]. Available: https://www.cnbc.com/2021/02/16/map-shows-typical-payday-loan-rate-in-each-state.html.
 J. Egan, "8 places you can borrow money," Credit Karma, 2020. [Online]. Available: https://www.creditkarma.com/personal-loans/i/where-to-borrow-money.