Activehours Eases Cash Flow By Making Any Day Payday

Cash flow problems? Activehours might be able to help you smooth the way money moves through your personal economy.

One of the Big Things that I’m interested in is cash flow. After all,?when your money comes in is just as important as how much you end up with. Timing matters when it comes to the way money moves through your personal economy.

I know. I’ve had problems with cash flow in the past, and managing cash flow when you have a variable income with your home business can be a real pain. Any strategy that provides you with a chance to smooth things out a bit is welcome.

Enter Activehours, a company that allows you to log the time you’ve worked, and then get paid for those hours, even if it’s not payday yet. For some workers, such a company is a godsend, since you?know that you’ve earned the?money; you just haven’t been paid for your work yet.

Activehours

How Activehours Works

For the last year or so, Activehours has been in “testing” mode. Employees from companies like Apple, Best Buy, Bank of America, Pizza Hut, Walgreens, and more have signed on, allowing their employees to claim hours worked, and then get paid for them.

Recently, though, Activehours opened up to the public and launched an app that allows anyone to access their hourly paycheck anytime — even if payday isn’t until next week. (Activehours also just received $4.1 million in seed money to grow its business model.)

Here’s how Activehours works:

  1. You sign up for Activehours and download the app.
  2. You upload your electronic timesheet (it has to be electronic).
  3. You choose which hours you want to be paid for; you can be advanced up to $100 per day.
  4. The money is deposited into your bank account (you must have a “regular” bank account and direct deposit must be available).
  5. You repay the money when your paycheck arrives. You can choose how much of a fee to pay. If you don’t want to pay anything, you don’t.

It’s important to note that Activehours is only available for hourly workers; salaried employees can’t sign up. Additionally, it’s not something for the self-employed, unless you pay yourself an hourly wage and have an electronic timesheet to share. (For the self-employed, FundBox can be a way to manage your cash flow.)

For hourly workers paid on a bi-weekly basis, this can be a helpful way to smooth out cash flow. This is because many bills are deducted on a specific day of the month, like the 15 or the 25. Bi-weekly paychecks, though, come on a day of the week, usually every other Friday. This means that some months your mortgage payment, which might come out on the 15, could come out a few days before your paycheck arrives, putting you in a bind.

activehours payday

Activehours allows you to smooth the process by requesting your pay when you need it — without charging the outrageous fees you’ll see with payday loans?or the worry you run into with hefty overdraft fees. The company hopes that most workers will pay Activehours between $5 and $10 as a “tip” for providing this service. Even if you pay up to $20 for getting an Activehours pay advance, you’re still likely ahead of the game when compared to payday loans and overdraft fees.

Watch Out for Developing Poor Money Habits

The only issue I have with Activehours is that it could encourage poor financial habits. I know that we all occasionally need a little help. We all make money mistakes, and sometimes, in spite of our best efforts, we end up with a cash flow crunch.

This is especially true if there is a lot of automation going on with your finances; when something is a little bit off, it can really mess you up. Having something like Activehours available as a financial?backstop can provide peace of mind and help you out of a tight spot (assuming you have enough hours?built up, and enough lead time to take the maximum $100 a day for a few days).

The danger lies in the fact that it can be easy to spend too much of your paycheck before you actually get it. Just as payday loans can be a death spiral that adds up to serious problems, Activehours might make it too easy to claim your unpaid hours for every little thing. Pretty soon, your paycheck is completely devoured.

While there are definite advantages to Activehours, I think it makes more sense to sign up to provide you with options and flexibility when it comes to cash flow. But you should try to rely on other strategies more often. Build yourself a cash cushion, and make it a point to live within your means. These actions can smooth out your cash flow, and reduce the need for something like Activehours to make up the difference.

And, if you automate, be sure to stay on top of your finances so that you don’t end up with cash flow problems due to carelessness.

2 thoughts on “Activehours Eases Cash Flow By Making Any Day Payday”

  1. Prudence Debtfree

    Anything that gives people a way to avoid payday loans has got to be a good thing. I agree with you when you say that it’s best to build up that cushion of finances, but until that happens, much better to avoid the high interest rates of payday loans. I wonder if Activehours operates in Canada?

    1. Miranda Marquit

      Yeah, this is definite step up from payday loans. But it still has the potential for encouraging poor financial behaviors if you aren’t careful. I like it as a backup, but not really as a regular thing.

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