Budgeting with Volatile Income

Have you ever imagined how challenging it is for an irregular income earner to plan for his savings and pay his bills on time?

A US based startup called ‘Even’ has already imagined it for you. They have created a platform to allow this niche segment to plan their finances smoothly.

 

What does it do?

Even securely connects to the user’s bank account which allows it to track and plan the user’s income, expenditure and savings according their past trends. It ensures that the user always has a sufficient balance in his account to repay his monthly bills.

 

To make this possible, they provide a credit service called pay protection and charge a subscription fee of $3 per week. Employers also have the option of partnering with Even and pay this subscription fee for their employees making the service absolutely free for the user.

 

The pay protection service is determined by the average pay check the user earns. For e.g. if the user’s average was $500 and he got a pay check for $450, Even would make a deposit of $50. The deposit usually arrives the next business day after his pay check. The user pays the money back automatically from a future pay check when he has more than enough.

Who are the users?

One important consideration for this platform is that it needs to have a simple interface, be affordable and at the same time practical for the average user. This is because it will have to cater to users coming from varied age groups and educational backgrounds.

Singapore, like the US also has a growing number of irregular income earners. These are primarily daily wage workers and, part-time and project based employees. The sharing economy can also provide an alternative, but unstable source of income. This segment lacks the comfort of easily planning for their future unlike regular income earners. They struggle to make their ends meet mainly because they are unable to manage their income sustainably. All they need is an avenue to keep track and account for their expenses and savings to lead a worry free life.

Could work for students?

As a SMU student, I feel the concept also has the potential to cater to the student population in Singapore.  Students are mostly on a tight budget and are always finding ways to maximize their pocket money. They also keep trying to look for ways to earn small amounts of money by doing part-time stints or surveys to make up for their expenses. A concept like this can help them manage their finances effectively and also help them save in the long run.

I found this concept interesting because it caters to a segment in the market which not many people think of. It has tremendous scope in today’s world with many jobs becoming contract based and people exploring options of doing multiple jobs at the same time i.e. freelancing.

 

Please do share your views and get in touch with SMU FinTech if you find this topic interesting.For more details on Even and its evolution, check out:

 

https://even.com/faq#pay-protection

 

http://www.nytimes.com/2015/05/03/magazine/want-a-steady-income-theres-an-app-for-that.html?_r=0

 

Arjun Khaitan

Alternative Finance Subcommittee AY16/17

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