78 percent of Americans live paycheck to paycheck every month. For the majority of us, spreading our budget this thin makes it quite easy to run into financial emergencies.
When our animals get sick, our cars need fixing, or our houses need repairing, we find ourselves needing some quick cash. However, there are right and wrong ways to go about obtaining it.
Follow along for a quick list of what you should and shouldn’t do to get yourself the cash you need in a pinch.
For many of us, it’s easy to get excited about getting a new car, updating our phone, or giving our home a fresh look. However, these things cost money, which most of us don’t have on hand. Before you start borrowing money, taking out loans, or selling your possession to fund your newest desire, take a moment to decide if it’s really necessary.
Some methods of obtaining money have heavy fees, interest rates, and other costs that may not be worth the hassle. In the event of an emergency (medical, vehicle repairs, house repairs, etc.), you may not have a choice. However, when you do have a choice, exercise your ability to make a responsible decision.
If you’re facing a financial emergency or otherwise deem your requirement for quick cash worthy, don’t go running to the banks just yet. Instead, ask a close friend or family member if you can borrow the cash from them. However, you must commit to paying them back in full, making payments, or finding another way to refund them.
Be careful in this scenario, however, as people have been known to lose relationships over money. Additionally, be careful who you ask. People have also been known to get offended by people coming to them for money.
Regardless, borrowing from a friend or family member comes with no legal documentation, fees, or interest rates.
If you need quick cash but don’t like the idea of putting yourself further in debt with anyone or entity, consider having a garage sale. Take the week to go through your home and gather up everything that no longer serves a purpose in your life. If you don’t use it or love it, it can go.
Alternatively, if you don’t feel like hosting an entire garage sale, you could post your things online. Facebook, for example, has community buy/sell/trade pages you can join for just this occasion. You can post items on there one at a time or do it in one big post – just be ready to field a ton of comments and messages.
If you often find yourself wishing you had more money in your bank account, maybe quick cash isn’t what you need. Maybe what you need is more recurring revenue. In this case, instead of looking for a one-time-off solution, seek out a way to continually make more money.
You can ask for more hours at work, get a part-time job, or find a new side hustle. You could start driving for Uber or Lyft, babysit your friend’s kids, start a dog walking service, clean homes, etc. Find a way to use your talents to make money.
Last on our “do” list is applying for a loan for quick cash. You have several options here, depending on your credit. If you have good credit, you can take out a personal loan with good terms (total amount, interest rate, monthly payments).
However, if your credit is a bit on the negative side, you may have to take a more drastic option. Title Loans can get you the quick cash you need. However, it does place a lien against the car.
When looking for quick cash, never make impulse or rash decisions. As suggested above, you need to think this through in terms of how it will affect your future finances.
Additionally, avoid borrowing money for frivolous you don’t need such vacations, designer clothes, toys, etc.
While there’s certainly no shortage of them around, pawn shops may not be the best choice when it comes to obtaining quick cash. When you get a loan from a pawn shop, you give them an item of value as collateral. However, you often get a tiny fraction of the item’s value ($800-TV equals $150-loan).
Additionally, if you fail to pay off the loan in time, you lose your item and whatever money you spent to get the item in the first place.
Credit card cash advances are a super-easy way to get quick cash. However, the cost is rarely worth the convenience.
Credit card cash advances charge an upfront fee as well as astronomical interest rates. These interest rates start the moment you take out the cash, rather than weeks later like other credit card purchases.
Payday loans are also relatively easy to obtain. They often use minimal (if any) credit checks. While this is great for people with bad credit, it also means the terms of the loan will be less than attractive.
Payday loans often come with heavy interest rates and even worse late payment penalty fees. They can be a saving grace if you have no other option, but can often lead to more financial strain.
Taking out a second mortgage on your home can be a good way to consolidate debt. You refinance your home and use the positive equity to absorb your other debts. However, doing this for quick cash can be dangerous.
It’s all too easy to use way more of the positive equity than intended and at the end of the day, that debt is still there, just in a different form. Then, when you go to sell the home, there won’t be anything left over.
If you, like most people, could use some quick cash, you have options. Just remember to be careful and consider the pros and cons of your potential choices. And if you’re looking for more useful information and helpful advice, be sure to check out the rest of our articles!
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