This unhealthy spending pattern creates stress in the rest of the month and creates a two-week survival period as disposable income dries up.
This repeating cycle creates an unhealthy financial "starvation" period followed by financial gluttony. Neuroscience shows that this behaviour is hard-wired and the result of our brain's neolithic origins. Our Stone-Age had insecure food sources, and so had to eat as much as possible when food was available to build up calorie reserves for periods when food was scarce. Our brain has evolved very little since then. Regulated intake of food occurred only when cropping became commonplace and food could be stored.
Obviously on payday many people take care of important expenses like rent, mortgage, car payments and utility bills, but the research also showed that 18 to 24 year-olds spent 40% of their incomes within 24 hours of being paid. More than half of this group were left with less than $100 to live on in the last week of the month.
Humans have notoriously short-term perception with respect to finances. A replenished bank account is alluring and deactivates the logic of financial temperance. In interviews with respondents, many admitted to loading up shopping carts online prior to being paid, and then purchasing the moment pay landed in their bank account. These purchases were uniformly discretionary and non-essential and mimic the response to "starvation" that our ancient ancestors exercised when presented with plentiful food.
ZayZoon smoothes income flows
ZayZoon's wages-on-demand technology helps people smooth their wages, and quells the starvation to gluttony behaviour engendered in lumpy wage cycles. A smoother flow of wages aligns better with a healthy financial perspective. People are less inclined to make unaffordable or irrational purchases if their bank account doesn't receive an outsized "sugar hit" once a fortnight or once a month. A more regulated flow of wages leads to more regulated financial behaviour.
A very obvious example of the "sugar-hit" effect is when someone shouts a round of drinks - that can easily cost $100 - on payday. Then two weeks later they have less than that amount to survive on for a full week and desperately need that money to get by. And yet this cycle is repeated perpetually.
The solution many people find is to turn to short-term high-interest loans offered by payday lenders. This is bad financial behaviour solved with a worse solution.
ZayZoon provides a more effective solution on both sides of this equation. In giving employees access to their earned wages, they can smooth the arrival of funds into their bank which lessens the "sugar-hit" phenomenon, and they can access funds when large periodic expenses need attention without turning to high-cost loans.