Money spilling out of a pot.
Money spilling out of a pot.

Pictures of Money/flickr

A recent wave of forward-thinking apps are adopting bold and innovative new approaches in order to wage a more effective war on poverty.

This might sound crazy, but paying more can actually save you money — when the thing you’re paying is your bills, that is.

Late payment fees and heightened interest rates kick in as soon as a bill passes its due date. Thus, by delaying your bill payment, you’re in fact racking up more bills. Most people know this, yet millions of Americans subject themselves to late fees on a regular basis.

The 2015 Financial Literacy Survey revealed that over 25% of Americans don’t pay their bills on time. And when you hone in on U.S. adults ages 18 to 34, that number rises to 50%. Given these figures, it’s unsurprising that the Wall Street Journal recently reported that American consumers cough up about $4 trillion in late payments every year.

Silicon Solutions

Luckily for us, app developers are taking it upon themselves to help people alleviate some of their bill-payment woes. Financial management apps like Prism and Digit help consumers stay on top of their payments and give them advice on their expenditures.

With Prism, a consumer can upload all of their bills into the app and then make payments from the app itself, all without being subjected to a processing delay. Prism even sends reminders about upcoming due dates and lends advice on how to save money going forward. Digit takes this idea a step further: it automatically sets aside a certain amount of your savings in a separate account every month, ensuring that you always have finances to draw from when bills are due.

These apps are great, but they share a common oversight: they’re designed to help people who already have a steady income. What about those who can’t always count on a monthly paycheck? One startup thinks they have a solution: an app that’s designed to regulate (and even supplement) your cash flow.

An Even-Headed Solution

Many consumers make their money on a per-contract basis, which means that their income can often be sporadic at best. When you zoom out, these people usually make enough to pay their bills on a yearly basis — but their cash flow is sporadic, which means they might not always have immediate access to the funds necessary to pay their bills on a monthly basis.

This demographic is far and away the most likely to fall victim to late payments and spiked interest rates. And it’s not as though this is an uncommon financial circumstance: In 2014, the Federal Reserve reported that over 30% of Americans suffer significant income swings.

However, Jon Schlossberg’s Oakland-based startup, Even (recently profiled in the New York Times Magazine) offers a potential solution to the problem of income volatility.

Even compiles the irregular paychecks of hourly and freelance workers, and converts them into a steadily flowing, simulated salary. Once you input your average weekly pay, the app calculates a monthly salary — if you earn more than the average, the app sets that money aside in a Even Savings Account. When you earn less, the app credits you money from this account or offers you an interest-free loan.

Schlossberg’s app is informed by neuroscientific research. He found that an unsteady income leads to cognitive stress, which in turn provokes bad financial decisions. In essence, an unsteady income makes you spend unwisely. Stabilizing irregular earnings will, in theory, help people manage and conceptualize their money a bit more prudently.

Build Your Own Poverty-Fighting Apps

There’s an altruistic renaissance happening in Silicon Valley. App makers are turning away from big money to create apps that help the poor — and now you can join the movement too! Infinite Monkeys’ user-friendly, DIY app building platform is so easy that anyone can make a mobile app for iPhone and Android! Who knew that making money could be so affordable?