Don't Lose the Time Value of Your Money: Get Paid Faster

Everyone subconsciously understands the time value of money — even if they don’t think they do.

If a man tells you, “I made $1 million dollars,” that sounds impressive on the surface. But if the same man tells you, “I made $1 million in 30 years,” that’s much less impressive. $1 million in 30 years breaks down to $33,333 per year, which is lower than the annual median personal income (approximately $33,706 according to the Bureau of Labor Statistics).

If money has a time value over the years, it also has a time value over days. You may have experienced this. Your paycheck comes in 3 days, but your light bill is due in 2 days.

Every time you get paid late, you are losing the time value of your money. What’s more, whoever is paying you late is taking advantage of the time value of your money. You lose money and they gain money, even though the nominal amount exchanging hands doesn’t change. These are the secrets that separate successful investors and financially secure people from those who can’t get ahead.

When you bank with Chime, you get your payday 2 days early. What does this mean for you? Let’s take a look.

The Difference a Day Makes

There’s a saying that “emergencies don’t happen on a schedule.” You are absolutely certain to wait on your paycheck until Friday (or whenever you receive it). But the light bill comes when it wants. Your car breaks down when it wants. The flu virus doesn’t wait until your check clears to attack you or your loved ones!

There’s something else you should know about the time value of money — it is a zero-sum game. Every day you lose is a day someone else gains. Rich institutions stay rich by accepting interest on the balances they hold on a daily basis. They also charge you late fees and overdraft charges if you don’t pay them on time. Imagine that — one institution holds your money and collects interest on it while another charges you a late fee because you don’t have your money from the first.

There is also very little incentive for institutions to actually pay you on time. Even if you do recognize the time value of money, the interest you lose per day is not worth the cost of retrieval. The businesses that are paying you know this, and they use it to their advantage. In order to fight an institution, you need an institution.

So where is the institution that is actually on your side?

Get Your Money Ahead of Time

If you are experiencing the effects of late paychecks, Chime is your equalizer. Even if you think you can survive to get a paycheck a day late, why not get it early just to feel better about yourself? Chime is the banking application that pushes money in your direction instead of away from it. Instead of fighting late fees and overdraft charges, Chime protects you from both. This may not seem like much to start, but those fees add up over time!

Chime gets you your paycheck up to 2 days ahead of time using direct deposit with an early access feature that allows you to access funds at payer submission rather than your scheduled payment date. This means you receive your money when you are actually supposed to get it rather than waiting. The Chime SpotMe feature is a service that speeds up your access even more. Depending on certain factors in your account history, you may be able to withdraw against your direct deposit anytime you need it.

What’s more, Chime protects you from over-drafting your account. Timing your withdrawals and remembering payment settlement dates can be confusing. Traditional banks may actually blame you for not knowing their system and charge you fees for it. Instead of punishing you for not understanding the fine print, Chime actually protects you from it.

The Difference in Business Models

Traditional finance is built on fees. This trend will only get worse in a post COVID world. Traditional banks need to show consistent returns to shareholders. They are not lending or speculating in a recessionary environment, so they are not making money on interest or investments. When they cannot do these things, they become cannibals. Unsuspecting checking and savings account holders will wake up one day to overdraft charges and new holding fees — little fees that the banks know most people will not have the time to contest.

Try it. See how long you last being given the runaround during your lunch break. Time is ticking! You only have 30 minutes to get your $36 back!

It’s time for a new system — a financial system that is not built on the backs of your deposits. When you take your accounts over to Chime, you are participating in a new business model that is focused solely on the customer. Digital finance has less overhead than hulking legacy banks, and Chime passes those savings along to you in many forms.

Chime protects your accounts in the same way as legacy banks. You have Federal Deposit Insurance Corporation (FDIC) protection up to $250,00, protection against fraudulent purchases and the use of more than 38,000 fee-free ATMs. You can also take advantage of real-time alerts for transactions and automatic savings programs if you are so inclined.

The banking institution you use is the first step you take towards or away from financial freedom. Chime is a part of the streamlined, customer-focused new breed of financial institutions that are actually incentivized to have your back. Will you do business here or with the legacy banks that have no allegiance to you? That allegiance can actually cost you $1.1 million over a lifetime. Talk about burying the lead. But if you made it this far, you’re obviously passionate about good banking.

You now have a million-dollar decision to make. Visit the Chime website for more information.