40% of Americans Can’t Cover a $400 Emergency. Here’s a Better Solution

Nearly 40% of Americans can’t cover a $400 emergency expense. That statistic alone explains why financial stress has become one of the biggest hidden issues in the workforce today.

In this episode of the Propagate Fintech Podcast, Roland Howard sits down with Rachel Fox of Sunny Day Fund to unpack the growing problem of financial precarity and why emergency savings is emerging as one of the most important new employee benefits.

Sunny Day Fund helps employers offer payroll-deducted, employer-incentivized emergency savings accounts that allow workers to build liquid savings for unexpected expenses. Instead of relying on credit cards, payday loans, or 401(k) withdrawals, employees can create a safety buffer that reduces financial stress and improves workplace stability.

Rachel explains why traditional financial wellness programs often fail to change behavior, how employers can meaningfully support workers who are living paycheck to paycheck, and why emergency savings and retirement savings need to be treated as two different financial tools.

The conversation also explores how banks and credit unions fit into the ecosystem, the role fintech plays in financial inclusion, and why storytelling has been critical to Sunny Day Fund’s growth.

If you’re interested in fintech, financial wellness, HR technology, employee benefits, or financial inclusion, this episode provides a practical look at one of the fastest-growing categories in workplace benefits.

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Chapters

00:00 Introduction and financial precarity in the workforce
00:49 What Sunny Day Fund is solving in the market
03:42 Why emergency savings matters more than most people realize
06:27 Breaking down the employee benefits stack
09:03 The hidden cost of employee turnover
12:43 The psychology behind saving behavior
15:03 Real employee success stories and impact
24:22 Why financial engagement is changing in the workforce
26:01 How storytelling helped Sunny Day Fund grow
28:23 Using social media and content to build awareness
30:31 The role of banks and credit unions in the model
35:12 Fintech partnerships vs disintermediation
37:53 Advice for founders building in financial inclusion
45:31 Legislative momentum and the future of emergency savings

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Key Topics Discussed
 • Emergency savings as an employee benefit
 • Financial stress in the workforce
 • Financial wellness programs that actually work
 • Payroll-deducted savings accounts
 • Employer-matched emergency savings
 • Retention and employee engagement
 • Fintech partnerships with banks and credit unions
 • Financial inclusion and economic mobility
 • The future of workplace financial benefits

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About Sunny Day Fund

Sunny Day Fund is a fintech platform that helps employers offer emergency savings accounts through payroll deduction. By combining employer incentives with automated savings, the platform helps employees build financial resilience while helping organizations improve retention and engagement.

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Connect

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Learn more about Sunny Day Fund

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Transcript

SPEAKER_00 0:04

Rachel, thanks so much for coming on the show. For people who are not familiar with Sunny Day Fund, what problem are you guys solving in the market?

SPEAKER_01 0:12

The main problem we're trying to solve is financial precarity in the workforce and just the crushing financial stress that most Americans are drowning under on a daily basis. We're doing that through employee benefits. And as a financial wellness benefit, we're doing emergency savings accounts that are payroll deducted and employer incentivized, liquid savings that employees can use at any time for any reason to really tear down the financial barriers of people not saving effectively right now.

SPEAKER_00 0:40

And so before you guys got into the market and you were offering this, what existed before?

SPEAKER_01 0:47

Before we got into the market, there were a lot of solutions around go figure it out yourself. Go go and go and set up a savings account, do a split direct deposit. That's something that people have been doing for decades. And a lot of people embrace that and can do that. I had always done that myself personally. But, you know, that we know that there's a lot of financial precarity that exists and that financial crisis is bubbling just under the surface for many workers. So if we can automate that through the trusted channel of their employer's benefit stack, this can really go to help further organizational goals as well, as impacting the meaningful lives of those workers by helping to just automate a lot of those things as the employee benefit stack does, instead of having them resort to retail products and seeing what they qualify for as an individual.

SPEAKER_00 1:36

And so when you talk about the employee benefit stack, what's the quick breakdown on what that's comprised of?

SPEAKER_01 1:42

So the employee benefit stack is whatever happens to be in the employee benefits handbook at that organization. So most organizations, the table stakes things that we're used to hearing about is health insurance, retirement accounts, and a couple other things that might include life insurance, disability, vision, dental. We're getting into the world of HSAs and FSAs becoming really common as well. And there could be a whole host of other benefits that are there, more point solutions driven for a specific problem that that workforce is trying to solve.

SPEAKER_00 2:14

Got it. So this is a pretty, this is a pretty niche space to be in. Have you have you been in financial wellness a long time? Are you are you a new entrant to the market?

SPEAKER_01 2:25

Well, I started doing um, I started running my own AfLAC agency in 2002. So that's what I chose to do with my biology degree. So um and AFLAC, you know, most people are familiar with AfLAC from the commercials and everything, but the whole goal of what it does is really infusing cash to families at a time of crisis. So I've always really been steeped in the world of financial precarity and understanding that delicate equilibrium that most employees are facing, where I've got income and I've got expenses. And for most families, those numbers are pretty close to each other. So if I have a month where something more catastrophic takes place and my expenses go up, even if my income stays the same, which is not usually the case, a lot of times income is going down. How do I cover this delta? What's happening here? So if I'm not saving, then I'm reaching for some sort of debt resource to fill in that gap that I'll have to deal with on the back end. AFLAC was really powerful in providing an infusion of cash to that family when a medical event took place. And I got to hand deliver those checks to employees. And so I understood, I could just see the stress and panic melting off of them because it's like at least I don't have to worry about money in the midst of all this. So when like the whole reason I was tr attracted to Sunny Day Fund is it's that same concept, but it's tearing down that silo of this is only for medical events. Now it's like this is for whatever that financial emergency in your life looks like. It could be a medical event, it could be a loss of income, it could be your hot water heater blew up or your or your furnace blew up, it could be your car broke down. Um, it could just be you're trying to get through back-to-school shopping or the holidays. Like there's all kinds of reasons that people go into financial shocks. Some of it anticipated, most of it not anticipated.

SPEAKER_00 4:10

Yeah. And this stat still just blows my mind that most Americans can't cover a$400 emergency is wild. And I guess that's tied into just the disappearance of the middle class. The job markets can underattack for a while, but uh that's pretty startling that a sub-1,000 crisis is a big, big problem.

SPEAKER_01 4:32

Yeah. And sometimes we see this disconnect happening on the employee benefit side where we have a pool of decision makers who are looking at things from one perspective, and many times are at a different phase of life than the workforce that they're making those decisions for. Um we see that a lot of times with with CFOs or CHROs that are like, well, they can just go and do this themselves. Um was like, well, they could go get an IRA too, but instead you've chosen to have a 401k and have massive adoption with that, right? So we're really trying to support our employees in a meaningful way. We can do this through the benefit stack. And then it provides a lot of really beneficial metrics on our operating expenses that we're looking for retention and we're looking for better engagement. And there's a lot of things that it can help to benefit us when we kind of incorporate it as an as an employee benefit to help make us be an employer of choice.

SPEAKER_00 5:24

Yeah, I think that's I think that's so powerful from a retention perspective because one thing I've heard in my career, which you know, society has no uh what's the word I'm looking for here? Like people are fed up with disingenuine things that aren't real or true, right? And so we really have a real nose for it. And one thing that I heard throughout my career was this notion of a work family. And uh if you've ever been involved in a layoff, the notion of the work family doesn't hold water when you see how quickly they can reduce workforce. This fund in this concept feels like it's breathing life into the idea of a work family where you're really taking care of your people way more effectively.

SPEAKER_01 6:10

Yeah, because we intentionally structure the employee benefits to try to be supportive of our workforce, right? We know our workforce, we know what they need, we know our people, but I consistently are having conversations with employers on a daily basis that are coming to me saying, I've only got 15% participation in my retirement plan. Maybe this isn't meeting the needs of my workforce where they are right now. Underlying reason, it's impacting what I as an executive and able to put into my retirement account if they're not participating, right? So there's a lot of those things where we really have to peel back the layers of what are you actually trying to operationalize here? What are we trying to solve for? Because that's always got to be our North Star. Um, but in the benefit stack on the retention side, I think a lot of younger or low to moderate income workers sometimes have this perception that the benefit stack is more advantageous for highly compensated employees and they can't always see themselves in it. They don't feel like this was built for me because yeah, I get all the other grown-ups are participating in retirement savings, but I can't put gas in my car today. Like that's not where I'm at. I can't start my savings journey by locking away money for 30 years from now. That's not where I am. I'm just trying to make it to Friday. So really understanding where people are and what's what's keeping them up at night is a much more effective way to build a sense of belonging where employees can say, yeah, you see me, you get me, you're answering the things that are most important for me and my family. I'm not going anywhere.

SPEAKER_00 7:33

That's awesome. Yeah, I could be totally wrong here, but the cost of funding this fund has got to be less than the costs in hiring somebody new, training them, paying for the mistakes of a new person.

SPEAKER_01 7:48

I mean, the number that I've seen consistently is$18,000 that it cost to put out ads, interview a bunch of people, have your HR team sort through all these resumes, interview people, and then have somebody train that person before they're up and running and have successfully replaced the person.

SPEAKER_00 8:05

Oh my gosh. And then sometimes they leave right away. They get a new, they're they're interviewing for several gigs. Yeah.

SPEAKER_01 8:11

Yeah. And so when you talk about it in in that frame, it's like, what is the cost of doing nothing? Right? Like there's always a cost to make an improvement. And I get it that health insurance is really expensive and it has gobbled up the lion's share of the budget that we have for benefit. So it's really difficult to think about benefit expansion when health insurance continues to be that monster that eats everything. But I know the employers are budget sensitive, but this is the exact same thing that we're hearing from employees. They're going, I don't have any money. Like my income is not keeping up with expenses and I don't have anything in reserves. Just like companies have short, short, you know, short-term cash dollar reserves that they're using for their operational budget. Employees need the exact same thing. So for employers to say, ah, we don't have a budget to bring in new benefits, it's like the same way employees saying, I don't have a budget to save, I don't have a budget to do this. We're never gonna advance anything if we keep on using budget as the reason why we can't improve. So we always have to talk about what is the cost of doing nothing because there are underlying costs like that that we're absorbing on and we're just keep on taking those punches. And we don't have to. We can recalibrate the way that we're thinking about things so that those dollars don't continue to compound.

SPEAKER_00 9:22

Those kind of sneaky, unforeseen costs that you don't really think about because they don't show up on you know in a statement.

SPEAKER_01 9:30

Yeah, but I mean when we see that, it's like we can look at, like, for example, on the retention front, because we've been talking about that. On an annual basis or a quarterly basis, let's look at the turnover rate among your saver population, the people who are participating in emergency savings, versus the turnover rate of your broader workforce of non-participants who's not. Those numbers will always be statistically different. They will be significantly different. Um, last year in 2025, we saw an overall improvement of 20% of our savers retention rate versus the broader eligible equipment. So that's meaningful. If you know that number, if you know whatever it costs for you to hire a new person, if you know what that cost is for your organization, and then if we can get mass adoption of people participating in our emergency savings program, we're typically seeing 40 to 60% voluntary participation. And you multiply that by a 20% improvement in retention, those are real dollars that we're saving that we can reinvest back into our workforce that's loyal to us.

SPEAKER_00 10:30

I I probably should have asked you this sooner, but you know, let's pretend you're talking to your neighbor who is a firefighter and is not thinking about HR tech or fintech. What how does this, yeah, how does this how does the platform work?

SPEAKER_01 10:44

So the platform works again as an employee benefit. This is our structural employer rails that we're working on, and that gives us a lot of benefits over retail products in the banking financial institution world because this way we're using the employer rails, so it tears down a lot of qualification barriers. But if I was talking to my neighbor and he asked that question, I would say this is a payroll-deducted, employer-matched liquid savings vehicle so that you can use it on whatever for whatever at any time to absorb those financial shocks. And the way that we're implementing that, again, is through payroll so that we're tearing down the barriers, the financial barriers that people might face if they were trying to do this on their own. So if I wanted to go get a high yield interest rate savings account somewhere, I would have to qualify for that high yield savings account interest rate. Those tend to be loss leaders for banks because ultimately they're trying to turn you into a wealth management client or into a mortgage or other things. So, you know, if I'm going to be evaluated based on my credit score, so I have to run a credit check. I probably need a minimum account balance requirement to bring in order to open that account and have that high yield interest rate savings account. Many employees might live in banking deserts, they might have some trust issues with financial institutions where they don't feel like this is super welcoming, or again, that I'm the ideal client there. So we do a lot of work on the trust building side, but it's really about the employer being able to come in and answer the call and say, I see you, guy saving up for taking your family on vacation. I see you, lady, saving up to try to, you know, get a new car down payment. As your employer, I want to support those goals that you have. You're working for us to earn that paycheck to accomplish specific goals in your life. Let me support you in whatever those fill-in-the-blank savings adventures are for you to create better savings behaviors and accomplish more with that exact same paycheck that you're used to earning.

SPEAKER_00 12:35

I would imagine what that there are some incentives that you guys bake into the program, maybe some accelerators of some kind. Is there a story around psychology here and saving that's worth unpacking?

SPEAKER_01 12:48

Yeah. And that's the big differentiator why somebody would participate in a 401k at their workforce instead of going to get an IRA on their own, right? There are different incentives that an employer is going to provide so that you participate here. And we've mimicked that same process because retirement savings has shown us that if people are not saving consistently through their paycheck, they're likely not doing a very effective, consistent job on their own. So for an employee on the incentive side, we can customize the plan design that the employer is going to put together based on some workforce metrics that we see. So the very first thing I'm going to do with any employer is ask for a little bit of anonymized census data information so that I can delineate is there a clear, you know, sometimes it's just hourly versus salaried populations where we're creating different groups. Sometimes the employer is looking to operationalize tenure. So we'll get dates of hire so that we can see if there's specific attrition trends within a certain location, within a certain, you know, department, within a certain job category, so that we can figure out where are the most of these loans and withdrawals from the 401k happening from? Where is the most retention problems happening? Where are the most non-participants in the 401k? Like whatever that problem is that you're trying to operationalize, we'll look at the data to point us to, oh, this is the population where we are really trying to operationalize this. And these are the people that we need to incentivize to start saving. Because all these data points show us they haven't really been saving successfully because we see all these other things happening. So if we do have a limited budget, let's just focus our budget on the people that have the most financial precarity that are manifesting those troublesome data points the most. So the employer contribution, and this is what comes from the incentive and the plan design, just like with a 401k, if you have an unmatched 401k, you can expect participation to be a little underwhelming, right? But if we have an employer match on that 401k, all of a sudden people are going, oh, free money? How do what do I need to do to get free money? What's max? What do I need to contribute to make sure that I maximize all those things? Same things happen with the emergency savings side. So employees will figure out how much money do I have to keep in my sunny day fund to maximize my employer match? Therefore, I'm incentivizing people not just to contribute and yank it out, but contribute and maintain a certain balance. And then we'll see aspirational goals taking place above that balance, but they have an incentive to maintain that so that it's there to draw from in a time of emergency. And that's typically delivered through, you can think of it as like a subsidized interest rate that the employer is doing. It's really a reward rate or a match percentage of whatever the average daily balance was. So we'll look at your average daily balance that you maintained in your Sunny Day fund the previous quarter. Maybe the employer contribution is 10% of that number each quarter, up to$50 a quarter or$100 a quarter. So they'll put some sort of upper limit on that. So we've got budget certainty. Um, in case I start some massive savings epidemic, we don't get all hogwow with the budget if everybody starts saving in mass. Um, but the hourly workforce might be like 10 or 15% per quarter. The salaried workforce might only be 5% per quarter. So understanding that even when people have higher incomes, it doesn't mean that they don't experience financial emergencies. It just means that their emergency expenses are usually more expensive than somebody who has a lower income. If my house costs more and my car costs more, repairs to those things are also going to cost more. So in that way, you know, if I'm saying you'll get$100 a quarter that's paid out as 10% of your balance, that's saying I really need to keep$1,000 in this account to maximize my employer match if I'm an hour hourly worker. If I'm a salaried worker and I'm only getting 5%, I need to have twice as much in that balance to maximize that employer contribution. So that's a more equitable approach for us, understanding that one dollar does not equal the same thing to everyone. And sometimes if you just have it across the board, the same, your low to moderate income workers are gonna go, man, that's just I'm never gonna get there. That's not for me. So we really try to make it be a reachable, approachable, bite-sized progress towards the goals that we've always wanted to accomplish.

SPEAKER_00 16:55

It's awesome. Okay. When I was probably, gosh, I don't know, 19 years old, 20 years old, I will, it was like two, I want to say it was 2008, 2009. I'm working at Wells Farago in collections, very beginning of my my career in fintech and banking. And one of the things that I do is you I would talk to people all the time, every day, about their hardships. And I couldn't believe that people who are making, and you know, you find this out in these conversations,$10,000,$15,000,$20,000 a month, and they're absolutely broke. And I just I could not understand that then. But you know, you you have a mortgage, kids, cars, emergencies, you know, what have you, and people live into what they earn pretty quickly.

SPEAKER_01 17:43

They live into what they earn. You can always find something else to spend more money on, right? So as people's income goes up, their need for emergency savings goes up just as much. We live in a big age of keeping up with the Joneses, right? And everybody's got a filter on their life, whether you're on social media or not. We're making it look like social media. Oh my gosh. We've got we're making it look like we have got this all figured out no matter what. And there is a keeping up with the Joneses in that I want to have all of these things and I deserve all of these things and I work hard, so there's that aspect to it. But it's also it's surprising how many high-income earners are really on that cusp and again are just one event away from a financial catastrophe. Now, they're not usually as squeaky in our workforce because they have resources to more things. They can qualify for a loan or they can get this line of credit or they can take a second mortgage off. Our low to moderate income workers do not have as many options. If people have poor credit or they haven't really just been part of the financial institution system a whole lot, the options for them are much more limited, which is why it's even more important to have their employer come in. Um, they trust their employer a lot, they trust that their employer has vetted these solutions. And especially if they historically have um, you know, just trust issues with financial institutions, they tend to trust their employer a whole lot more and will engage here where they might not know where to begin to do it on their own or qualify for things on their own in a retail product.

SPEAKER_00 19:07

Yeah, no, that that makes sense. Totally, I totally get that. And you guys are a fintech who is playing in a space that not a lot of innovation happens in, which is supporting I mean, I would imagine a lot of the value that you guys deliver are to people who are on the edge, right? Like, man, you miss your rent or your mortgage, and that could be it, and your family's going through a wild transition and having to move. And there's not a lot of innovation that's happening at that end of the market.

SPEAKER_01 19:45

Yeah, and the innovation that's happening is is can be really narrow, right?

SPEAKER_00 19:48

It can be or like predatory, which I think has kind of been a lot of what's been available to these guys.

SPEAKER_01 19:54

Yeah. Um, I think that you know, your options diminish a lot if you don't have great credit or great income or a lot of these numbers that the financial institutions want to see. So that's the other thing. When your employer brings something in, you have access to it. If my employer doesn't offer it, yeah, maybe the only thing that's out there for me is a payday loan. And those are just really difficult to overcome. And there are people that are using them consistently. Like I know that they're always designed for the one-offs, but there are people who are using them consistently. Um, we see that against for bless you. We see that against uh 401k loans and withdraws as well. But like we want this to be on the mute. We want um, you know, 401k loans and withdrawals to really be um a last resort. But for many people, it's a first line of defense. That's where all my money is. I don't have any money anywhere else. I've automated this system through my employer. So I've got this pot of money over here. And, you know, employers are like, oh, we've limited our loans to, you know, they can only take three loans at a time. And I'm like, really? Okay. So this is something we should talk about because, you know, set it and forget it is a little bit different than break in times of emergency. So the retirement account, you know, needs to be prioritized as a vehicle for retirement. Um, I know it's the 401k has become a little bit. Yeah, the 401k has become a little bit of a Swiss Army knife lately, like it can do this and it can do that, it can do emergency savings, it can do student loans. Right. And then we kind of wonder why nobody's retirement ready. So I really feel like retirement savings and emergency savings are really two sides of the same coin, but really fundamentally need to be in two different vehicles because they're accomplishing two different purposes.

SPEAKER_00 21:33

Totally makes sense. Yeah. No, I that's uh It's terribly logical, isn't it? Terribly logical. What are you doing making all this sense? Let me let me ask you about success stories or or wins. Do you guys have some awesome testimonials from from your customer base?

SPEAKER_01 21:49

We do. We have awesome testimonials both from employers as well as employees. So, you know, the capturing those sunny saver stories is a big part of our storytelling that we're pretty reliant on. And, you know, improving financial outcomes for employees is really at the heart of our mission. We're doing this through employers. And yes, it benefits employers through operational metrics and initiatives that they want to have as well. But our North Star always has to be are we making lives better for employees? And that's where in the world of kind of financial wellness and that fluffy word of all the things that it can be, there's lots of tools out there that are calling themselves a financial wellness tool. But we always have to be grounded in what is the problem we're trying to solve? How do we show that we're making progress towards those goals and improved outcomes? And what is the best tool that's going to get us there? So, in kind of the noise of the financial wellness sphere, there's lots of, I mean, it can be anything. That's why I tell people, don't just include the words financial wellness on your employee engagement survey. It's always going to come back number one, and then you're going to be stuck with how do I operationalize it? Because that could mean a budgeting tool, or it could mean retirement, or it could mean financial coaching, or it can mean emergency savings accounts, or it could mean, you know, like earned wage access or a payroll-deducted loan or, you know, emergency cash grants. There's all these different things that work around the words of financial wellness. But what is actually going to contribute to the positive financial health of our workforce? The Financial Health Network has done really great survey and research around all of these different products are available as an employee benefit. But which are the ones that actually move the needle on positive financial health and which ones are correlated to a workforce that has a more stronger financial health positively, then people who have perpetual negative health are using these resources a lot more. So that kind of lets us know which are the ones that are actually lifting people up and out and laddering them up the economic mobility ladder and which ones are helping them kind of spiral the drain faster.

SPEAKER_00 23:50

The dichotomy is very interesting. Sounds like is there quite a bit of data out there around kind of what direction people are headed in?

SPEAKER_01 23:59

So there's a lot of data around things that are out there and things that are showing a lot of results. That's why going back to our testimonials on our saver stories, it's so important to capture those stories and understand the decisions behind those data points so that we understand what's working and why. So both on the employer and on the employee side, you know, those testimonials kind of talk to that point about yes, we've seen retention. Yes, we've seen better retirement participation since bringing in an ESA. Yes, we've seen fewer loans and withdrawals against our retirement account. Yes, we've seen more engagement in our workforce, being more grateful, feeling like we've supported their culture and a lot better. And on the employee side, we're capturing all those stories that talk about those things that you just asked about. So, yes, I never participated in the 401k before because I didn't think that this was for me. It wasn't a benefit that spoke to me, and I was never somebody where that seemed like it was great. Financial wellness resources are like, that's for people that have money. That doesn't apply to me. So understanding how this can be something that, oh, this is for me now. Or, you know, my employer helped me save up for this new car down payment, or understanding my employer helped me save up for this property note bill, right? Which what I never would have been able to pay this off without that. So capturing a lot of those stories about what's working and why is important to kind of understand where we're going. And yes, we're following legislation, we're involved in a lot of those legislative conversations. This is a new category, and so it takes a lot of people kind of shaping that category because since COVID, it's been very abundantly clear people don't have enough emergency savings, and let's tackle that through the employer rails, just like we did through retirement.

SPEAKER_00 25:38

That's awesome that you guys are getting involved and plugged in like that. Let me let me draw you out a little bit on growth. When you're trying to grow a company like Sunny Day Fund, benefits and the employee stack not very well understood by people. I'm guilty of this, but how do you grow a business in a market where you have to do a ton of educating of people, employers and employees?

SPEAKER_01 26:05

Yeah, I think that the easiest way to do that is through our story storytelling. So case studies will always be really paramount. Everybody wants to see what's worked for somebody else and see if they can see themselves in that equation. So early on, it was really just talking about the problem. And we didn't want to focus on the solution so much. We wanted to talk about the problem. Everybody thinks they're the only one that has this. Everybody has this deep financial shame and they think they're the only one that has it because of the keeping up with the donors thing. So I think revealing how widespread this is and how ubiquitous this is really lets people know oh, I'm I'm in the majority here. Like everybody looks like they have it together, but everybody's really panicking every month on when that credit card bill comes in. So talking about the problem and letting people understand this is a really widespread problem. It's something that you're a part of, it's something I'm a part of, it's something we all have to deal with on a day-to-day basis. Um, and there's no one magical fix-all to it. It takes a matrix of financial incentives and solutions to help people get on the right path because people are at different stages of their life and they need different support. So sometimes that can mean student loan debt, sometimes that can mean paying down other kinds of debt, sometimes that can be focused on long-term retirement savings. A lot of times it's the short-term things that people don't have a strategy for. They're afraid to go meet with a financial coach, they're afraid to go meet with a financial advisor because I don't have anything saved up. I know things don't look good and I don't want to be lectured, right? And that's never the focus of what that professional is trying to do. But it's really difficult to get somebody to open up about their personal financial history to a stranger in a suit if I feel already embarrassed and shameful about it. So if we can get people started on saving, if we can get them automated into say it's like at least I'm doing this, I'm started, I got this going for me. Um, and it opens the door to a lot more of those conversations. So the growth has always been focused on understand where you are, understand how where you're going. How are we gonna get you there? We're gonna do it with your employer's support so that you're not trying to figure it out on your own.

SPEAKER_00 28:07

So, Rachel, you've talked about the importance of storytelling. You guys have used white papers. Like, what other channels have you guys used to get the get the story out there? Like, are you on TikTok? Are you on Instagram? Are you like, are you are you everywhere? Like, what's the strategy look like for you guys at a at a high level?

SPEAKER_01 28:27

Yeah, if you go to Sunny Day Fun's TikTok page, you can it's just my mug. You'll just see me, a thousand videos of me. So um, we are there. Obviously, our website is a great way to find out more information about us, but as far as people just stumbling across us or us introducing this idea to people who weren't familiar with it, um, yes, our socials are out there as well as LinkedIn. That's really the place where we're posting really consistently and we're sharing saver stories, we're sharing client testimonials, we're sharing, you know, speaking engagements that we're doing at the Fed or at the Aspen Institute or JCEA or at the Center for Retirement Initiatives, like all these different places of thought leadership. We're doing industry advancements there. So as legislation continues to advance, we're asking for auto enrollment, we're asking for a tax-preferred employer match in the future. A lot of those advancements will be shared on LinkedIn, as well as continuing just to talk about the story and the problems that employees are facing and letting employees and employers and consultants know people don't always know to ask for this. They don't know that it's a thing, they don't know what it's called, but they know that they're crushing under this financial stress and that something has to be done. So we just naturally try to show up into those conversations where it's happening. On the distribution channels, our our strategic partners have been really influential in getting the word out there and getting more awareness on our brand to different audiences. So we're working through benefit brokers, we're working through retirement plan advisors, we're working for workforce development organizations, you know, private equity firms, employee ownership organizations, to really say, I have this particular workforce, we've noticed some deter disturbing trends there. What can we do to improve these metrics and improve the lives of our workers? And those partners have been really integral for our growth as well.

SPEAKER_00 30:17

You guys have done a great job growing the business, getting the name out there. I've I've seen you on TikTok. Yay. So, you know, the show is called Propagate FinTech. I'd love to understand, you know, where banks and credit unions are fitting into like where you guys are getting market adoption.

SPEAKER_01 30:35

Yeah, so banks and credit unions, financial institutions in general, are a really important part of our work. You can think of Sunny Day Fund as an ESA record keeper. So we're like an emergency savings account record keeper. We are not a bank ourselves. We are a fintech. So we rely on financial institutions to house these employee deductions, to be the depository, to be the custodian of these funds. So we'll partner with community banks and credit unions so that employee deductions, which are post-tax deductions coming straight out through payroll, all of these different employee accounts, right? It stays in the employer's payroll account. And then, you know, we can make a pull from that employer's payroll account. So it's a single poll. I'm not pulling, you know, 2,000 different transactions. If we've got 2,000 participants, it's a single poll and a bulk file. Um, and that goes to a gateway account that we then allocate into specific employee accounts at that financial institution. So this is another part of why the structure of an out-of-plan emergency savings account as an employee benefit, like we do, is such a specialized financial product. Because we're working with banks and credit unions to be the custodian of those funds. For the banks and credit unions, these are really great clean, safe, recurring deposits, right? We are going to do our due diligence on the employer because all the funds come from the employer's payroll account. So there's a step of due diligence that our banks and financial institutions do to verify this employer is real and legit and exists. And then all the employees that are contributing are all I-9 verified individuals at this due diligence qualified employer. So that means, yes, it's like a 401k in that if you're a saver on Sunny Day fund and you inherit$10,000 from your grandma, you cannot transfer that into your Sunny Day fund because we've intentionally restricted the flow of funds so that we can have minimal KYC and safer anti-money laundering than if we had funds coming in from all different sources. So into their Sunny Day funds, it's just coming through payroll deduction and going into these allocated accounts. Everybody has their own routing and an account number. And then if employees separate from the employer for any reason, contribution stop, the employer and employee contribution stop, will reach out to that employee and understand where they're going, because then I'll talk to their new employer and get it set back up on payroll for them at their new employer. Or if they just choose to leave the money in there, they continue to earn the high interest rate from the bank and can draw down those funds. We'll tell them your Sunday day fund should be a first line of defense, liquidate your Sunday day fund if you need to. Don't cash out your 401k, roll that over, and we will help you do that. So we have a partner called Manifest that helps do automated plan-to-plan rollovers on the 401. So we can have that continuity of that money horizon. Everything stays in one place. We know what's happening all the time. But the banks and credit unions are really integral for what we're doing, and we're always looking for new custodians and new depositories so that we can expand our deposit capacity as we take on more enterprise clients. Credit unions specifically have been really influential because they've been coming to us saying, we've been focusing on the members a whole lot. And then we kind of walk past our employee talking to somebody on the phone. It's like, what did you say? Maybe we need to focus on our employees a little bit. And they've seen their own 401ks, you know, start being tackled a little bit more than what they would like. And so now there's this effort on let's work on the employees directly. And then it's like, wait, can we keep the employee deposits of our own employees in Sunny Day Fund at our institution? Wait, can we turn around and have Sunny Day Fund be available as a SEG strategy? Because you guys are having 40 to 60% voluntary participation of these employees. Right now we've only got 3% that have a savings account opened with us. So if we can get all those employees at that SEG started saving, you know, through this, then we've got a lot more deposits, we've got a lot more momentum with that population. And in their Sunny Day fund, they're saving up for a new car, they're saving up for a new home. We can provide that car loan or we can provide that mortgage. So there's lots of support that we are providing back and forth between our financial institutions and us. Um, but ultimately that symbiotic relationship is a really structural part of our Sunny Day fund.

SPEAKER_00 34:48

No, I think that make that makes a lot of sense. And you know, there was a long while there where credit unions and banks, I would say, especially community institutions, there was a lot of anxiety about fintechs coming into the market. Like one of the first, probably earliest examples was Venmo. Venmo came in and did P2P person-to-person payments really well, and really kind of like stole that uh vertical from the bank, banking industry. And so, you know, there's a lot of anxiety around, oh my gosh, these fintechs are coming in and they're they are disintermediating us from our customers. And I feel like financial wellness and the banking industry, banks and credit unions, being able to wrap their arms around what financial wellness does for the market is a great way to increase the sticky, the sticky factor, right?

SPEAKER_01 35:42

Yeah, I think that overall the whole structure within banks and credit unions has shifted over the past few decades, right? We used to pride ourselves on my, you know, member would walk into the bank and I recognize their face and I know their dog's name and I have this personal relationship. Now it's really a digital platform where we still have a lot of that happening, but we're really switching a lot more to digital tools and accessibility where we don't have as much human interaction on the one-on-one basis. Because, you know, the younger generation is coming in, they're very digital, they're very tech savvy, maybe they have insomnia one night at two o'clock and they're just going to take care of their banking stuff then. It's just a different way that we can engage people, and ultimately that's what the market is starting to demand. I think that there's still a lot of focus within banks and credit unions around um guidance and education and literacy, which is lovely and wonderful, and we are aligned with that, but it's still putting the onus on the employee to take the action step. It's putting the onus on the individual for that member to take the action step to, you know, click on this, go to this website, open this account, do all these things instead of kind of automating much of that process. Um, and so that's really where, you know, we're getting 40 to 60% adoption within companies that are doing this. So these employees are gonna do this anyway. You can house these deposits or not be involved in these deposits, right? It's just like this is happening, this tide is coming, the shift is happening. Um, and you can either see how this is going to help further your own growth or you can continue to see it as, you know, this is a wave of the future that we're having a lot of problem embracing. So, and and we see that happening. We see those conversations happening where we really have to shift our mindset on how, you know, which of these are working well that we can align with and that we can partner with so that we can be a part of their growth instead of kind of feeling like we're on two separate sides. We're trying to accomplish the same thing.

SPEAKER_00 37:42

If you were meeting another founder who is trying to do something in the financial inclusion or financial wellness space, what's one piece of advice that you would give them about just trying to get adoption and traction in the market?

SPEAKER_01 37:58

Um yeah, be prepared for people to say you don't need to do that. So be prepared for people to be like, oh, people can already do that. Or when we talk specifically about building something that's financially inclusive, um, again, we just feel like, well, those are just kind of the people on the fringe. We really need to focus on the majority of the people. It's like, yeah, I get that.

SPEAKER_00 38:19

That's the safe bet. Yeah, that's the safe bet.

SPEAKER_01 38:21

And a lot of people are doing that. But our whole goal on financial um, you know, inclusion and financial wellness as a whole is making sure that everybody has a pathway into this. And it's not just for these people. And if you're kind of on the fringes, you know, no, no soup for you. Those are the people that need it the most, you know, like this is this is our mission. These are the people that should be at the heart of what we're doing. These other people, they'll go along.

SPEAKER_00 38:44

I like the Seinfeld reference.

SPEAKER_01 38:45

The Seinfeld reference. Yeah reference. Um, you know, the masses will just follow the crowd. They'll just, but make these people like the core of your work, and that's building it out for the hardest scenarios. Everybody else is going to be easy compared to that, right? But get used to a lot of people saying, you don't need to do it that way. Like again, CFO. What are you thinking?

SPEAKER_00 39:04

This isn't where the money's at.

SPEAKER_01 39:07

Right. People can already do that. People can already open a savings account. Why are you guys doing this? Why is this necessary? Where I'm like, so you can you can go open up a high yield savings account on your own and do a split direct deposit and all those lovely things. But your guy making 22 bucks an hour on the line might not be able to do that.

SPEAKER_00 39:23

Yeah, it's like, will I do it?

SPEAKER_01 39:24

I mean, and he, you know, yeah, there's a question of can they, and then there's a question of will they? Sometimes it's just not an opportunity for them. Sometimes they have poor credit, they've been justice involved, they they just have reasons why they're not going to qualify for these programs as an individual. And then there's other things where it's like, yes, will I? So, yes, I can provide you all the different materials. Here's all the literacies, complete this chapter to get a star, do all the things, learn all the stuff. But human behavior is not typically learn all the things and then start doing, right? Um, and that's where it's really important, especially in people that are that are in crisis. Like if I'm drowning, don't throw me a book on swimming theory. That's not gonna help me at the moment, right? And this is where we're at. It's like, don't lecture me on what I should have already done. This is happening. And so, yes, we can hand out a lot of free fire extinguishers to people, but then we're kind of, you know, resolving to the fact that we're just gonna have more fires and we're just gonna have more people in crisis more than all the time. And how can we help them put out the fires instead of saying, how can we prevent the fires? How can we fireproof? It takes a little bit more money to fireproof, but ultimately this is what we're trying to go after. Um, so especially in the world of financial inclusion, it's like it's really important that we have multilingual abilities on all of these um apps and sites and all the techie things, um, or people don't feel like this is built for them. We really have to tear down financial barriers because the people that don't qualify for things are the people that are in those spirals that it's impossible to get out of the way.

SPEAKER_00 40:56

They need it the most.

SPEAKER_01 40:58

They need it the most. So, yeah, we're not gonna gate it. Employers are always like, well, can I can I make sure that they're only using it for an emergency? And I'm like, who's gonna determine what an emergency is? Like, no.

SPEAKER_00 41:09

Yeah, you don't want to wade into that topic.

SPEAKER_01 41:11

No, do not. And that's why we're they're not engaging in other restricted vehicles, right? 401k, the HSAs, FSAs, we've made all these tax preferred, tax-optimized solutions. They're they don't care about taxes, they care about putting gas in their car today. And they're not making decisions around tax optimization. They're making decisions around, oh, I'm gonna get a hundred bucks from my employer if I start putting five bucks of a paycheck into this thing that I can actually access if I need it. Nobody's gonna come in and be like, well, let's see if you qualify all the checked boxes here. Um, because that's why, that's why 401k loans exist, because not everything qualifies under the hardship withdrawals, right? For a hardship withdrawal, it has to be one of these things. You have to be facing eviction or it has to be a medical event. What if my sister's facing eviction and I want to help her? Oh, that doesn't count, right? Well, I can take money out of my Sunny Day fund to use that. Are you gonna, right? So I don't want to have to report it back to anybody, what I'm doing with it. That's part of what I see as building financial stability, independence, dignity that I can do with my money what I want to, what I determine is the most necessary thing.

SPEAKER_00 42:14

Yeah, and I think the questions around, hey, can I kind of gatekeep the fund is part of the DNA of a 401k? Like it has protections, it has things that dissuade its utilization or its usage, rather. And so it's I guess it's kind of a natural question where people are like, all right, well, how do we insulate it from being used?

SPEAKER_01 42:36

Right. Where I'm just like, let's go back to the purpose of what we're building. We're building money that people can use. So we want to let them use that and encourage them to use that. We are not trying to develop this, you know, hockey stick line that goes up and up all the time that never comes down, like you would with investments or your retirement plan. We are really trying to. So last year, just a couple metrics that kind of paint the paint the picture of how employees are using this. Over 2025, the average contribution that we saw per employee on a monthly basis was$211, right? And overall, we saw about$2,700 of money going into the account over the course of the year. So that's the average of employee contributions, employer contributions that are coming in as that match, and the high yield interest rate that's coming in from the financial institution. We saw anywhere from two to four withdrawals on average over the course of the year per employee. So people are tapping this maybe once a quarter. And the average withdrawal was about$330. So we go back to that Federal Reserve statistic of nearly 40% of Americans can't afford a$400 expense. We're seeing withdrawals that are pretty close to that number, that are answering, like people are not using this to buy a pack of gum at the gas station. Right? Like Pierre, well, not using this as a transactional spending account. They're really just viewing this as a savings account. Within the Sunny Day Fund app, they can create these different buckets, right? Things that I'm going to save for because that's why we're not called the Rainy Day Fund. We don't want this to be a fear-based motivation to save for all the doom and gloom, terrible things that are going to happen to you. We know behaviorally, for somebody to be excited about saving and engaged in saving, yes, save up for emergencies, right? Take those vitamins. But also, what are the aspirational things that you're really excited about accomplishing? That person that's saving for both of those things will have a higher per paycheck contribution and a higher overall balance to draw from should something catastrophic take place. So it incentivizes better savings behavior. Throw an employer incentive on top of that, and man, we've opened up a whole new world of behavior that employees never would have accomplished on their own. And now they're able to achieve things that they never would have been able to achieve on their own because their employer created an access and an incentive for them to be able to accomplish these things. So that's been hugely important in our momentum and building something unique that's solving the exact problem. We're creating that visibility, but it's also about building trust so that employees can be like, I recognize this brand, I know this product works, but I don't know if it's for me or if it's I'm eligible or if I qualify or if it's gonna help my situation. All of that tears down that noise and brings everybody into the circle.

SPEAKER_00 45:24

That's great. I love that. So, Rachel, uh just wrapping up here, what trends are you seeing in the financial wellness space that are making you feel optimistic?

SPEAKER_01 45:35

So there's a couple different aspects of that, but the first one I would say is legislation. So in 2022, we had the first piece of federal legislation around workplace emergency savings accounts, and that drew a lot of attention to the category. Now, that specific piece of legislation was around pension-linked emergency savings accounts or PLESAs, because we need one more acronym in this industry. So PLESAs are in plan, subject to ERISA, Form 5500, loss of compliance and regulatory issues, which has made adoption there pretty much nil. Um, but it's caught a lot of attention to the category. And now we're working on out-of-plan ESA bills where we're asking for auto enrollment and we're asking for a tax-preferred employer match, which will fundamentally change what we're able to accomplish and how many people we're able to help and serve here. So that on the legislative side is front number one. Um, the other one really just comes with continued industry momentum between employers, our channel partners, and um employees that are really kind of saying, is there something that solves this problem where my employer can help me? Thanks to the younger generation coming in, right? Older generations are like, this is my own personal money. I don't need to talk to anybody about this. This is younger generations are coming in, like, what's everybody doing? How are we gonna get better with this? I don't have any money. Where like you should help me with this, employer, because we're not teaching any financial literacy in schools, and then we're plopping call, you know, credit card companies on college campuses and wondering why the younger workforce is coming into the workforce already in debt. Everything's free. Yeah. So really helping employers decipher the little bit of the noise that's out there. So some things like earned wage access and payroll deducted loans are rather ubiquitous because they're free for employers to offer, um, but they do not always promote positive financial health. They're really just free fire extinguishers that we're handing out to people understanding they're going to be right back in crisis again. Or we see employers coming to us because there is this widespread epidemic that nobody's talking about, where many mid-market to smaller employers are doing internal personal loans to their workforce, right? We're a small family-run company. We've employed this guy forever. He just needs 400 bucks to get him by. Maybe he's not participating in the retirement plan, or maybe we don't allow loans against the retirement plan. I'm just gonna float him the 400 bucks and pull it back through payroll deduction. But dag on if that guy isn't back in my office in six months from now asking for another$400 and he bought three people with him. And the employer's like, I'm not a bank. I can't afford to continue to do this. I don't want to tell them no. I don't want to send them to a payday facility. I want to support them and do responsible help assistance here, but I don't understand why I gave them the money. Why is that not improving things? Right. And it's like, if you continue to be the FEMA, they will never need to build the levies on their own. And so that is a precedent that you have now set saying you don't have to ever build financial independence. I will swoop in and rescue you every time. So that's why that is perpetuated. So if we give them a system where it's like, hey, I'm not gonna, you know, throw you to the wolves or send you out and tell you to go pound sand, I'm providing this payroll deducted way where you can start saving your own dollars and I will encourage you with employer contributions based on your savings behavior there. So the next time you come to me and ask me for a loan, the first thing I'm gonna do is look up and see if you're participating here because I've given you tools to help yourself where I'm gonna help you as well. But this is what I need you to do. So these are the market adoption, you know, concepts that we're talking about with employers. These are the problems employers are trying to solve. They're either coming to us because they've got a non-compliant Christmas club on the books, they're trying to improve their retention on on, you know, with just employee turnover, they're trying to get more participation in the 401k, they're trying to reduce their 401k loans and withdrawals. There are very specific reasons that employers are coming to us as we perpetuate that storytelling about how effectively this is addressing those through our saver stories, through our employer testimonials, through our through our strategic partners, that market adoption will continue to grow because we know the problem persists. They just don't always know the solution is out there.

SPEAKER_00 49:38

Awesome. So you guys have good, essentially, market acquiescence in really all the right places. So that's uh that's fantastic. I expect to see you guys continue to rise here. So uh, where can people learn more about Sunny Day Fund? TikTok, I'm guessing.

SPEAKER_01 49:54

Yeah, so TikTok is there. Um, the website is definitely gonna be a fount of information that you can access. A lot of my TikTok videos are on the website, so you can access that there. Feel free to follow us on Sunny Day Fund on LinkedIn. So that is the way that we are putting out the most up-to-date information and routine updates there. Uh feel free to follow me on LinkedIn. I'm posting on an almost daily basis. Most of it is about financial savings. Sometimes it's just rants. You just never know what's going to happen. But I think it's important in this world of AI to know that there are real people behind this company. We built this company out of our own lived experiences and understanding what it's like to see red in the bank account and knowing that there's a way that you know we can help all employees on a pathway forward.

SPEAKER_00 50:35

That's awesome. Rachel, thanks so much for coming on the show.

SPEAKER_01 50:37

Thanks for having me. This has been very sunny and great.

SPEAKER_00 50:40

Yeah, absolutely. All right, well, cheers.

SPEAKER_01 50:43

Thanks.

SPEAKER_00 50:44

Hey, thanks for being here. If you or someone else you know would like to explore coming on the show, fill out a contact form at propagatefintech.com and we can explore some content ideas with you. Also, we are an end-to-end marketing and PR firm only supporting the bank industry. So if you would like to explore going deeper with Propagate, again, feel free to reach out to us so we can explore whatever that you are working on. See you on the next one.