MINNEAPOLIS — More and more Minnesotans have seen payday move from Friday to Thursday — or even Wednesday. According to the Star Tribune, the trend is being driven by banks, but it turns out, your employer plays a part as well.
When Affinity Plus Federal Credit Union launched an "Early Pay" feature in May of 2022, they joined a growing list of banks - big and small - offering services with similar names.
Whether it's "TruPayday" from Trustone Financial Credit Union or "Early Pay Day" from Wells Fargo, the premise is largely the same: If you have direct deposit set up, the banks are often giving you access to that money a day or two early.
"At least from the Affinity Plus perspective, this is something that we can do that was going to impact the most of the most right away," said Jacquie Twedt, director of operations for Affinity Plus.
Twedt says nearly 93% of U.S. workers use direct deposit, and that reliability is also why banks like hers face little risk in providing early access.
"Typically, we - at the financial institution - receive information for the deposit before we receive the funds," Twedt said. "So rather than just kind of sit on that information, we're just posting the funds early to our members' accounts. I think the first day that we did it, we posted something like $60 million early to members' accounts, and nobody has to do anything."
But that still doesn't guarantee an early payday for all members. Twedt says roughly 50% of Affinity customers actually see their money arriving a day or two early.
Twedt: "Posting early is really dependent on when we get that information from the employer."
Erdahl: "So, if people have questions and they say, 'Hey, I'm not seeing this,' they should talk to their employer about when they're sending that info?"
Twedt: "Yeah, or encourage their employer to talk to whoever processes their payroll."
No matter who you're talking to, Shannon Foreman, founder and CEO of Forethought Planning, says it's a topic of conversation that's destined to grow louder in the year to come.
"In many cases, a lot of these financial institutions are saying, 'Why wouldn't we do this?'" Foreman said. "There is so much competition for the banking and financial industry that if you're not heavy on the tech side, you're probably losing clientele at this point."
In addition to the convenience, Foreman says the extra day or two has the potential to help anyone living on a tight budget avoid late fees on bills and high-interest payday loans.
"We hope that this might be an element that would close wealth gaps, income gaps, things like that," Foreman said. "That could help move individuals forward into having a healthy, sustainable foundation for their finances."
But for that to happen, she says, more than just your payday has to change.
"It comes down to our behaviors, so is your behavior going to change from Friday to Wednesday?" she said. "If you are a saver or an investor, splurger or saver — whatever you might be that you identify with — it's important that you understand your personal financial behaviors."
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