We all know the feeling of having a money crunch. Perhaps you complete your 1040 tax form and discover instead of a refund you are going to owe $2,000. Maybe your car has an unexpected $600 repair. If you don’t have an ample emergency fund, gathering that extra money quickly can be difficult. If you need fast cash, here are some options:
- Sell your stuff. We all have extra “stuff” around our house that we don’t use. Gather it all up and sell it. For more expensive items, consider Craigslist or eBay. For other items such as clothes or smaller household goods, have a garage sale.
- Take out a short term loan. There are plenty of places you can get short term loans from pay day loan companies to credit card advances. These loans are available quickly, and are the fastest way to get the money.
- Borrow from your peers. A relatively new place to borrow money is through peer-to-peer lending sites. You submit some documents related to your credit, the peer-to-peer site assigns you a letter grade based on your credit worthiness, and other members can choose to fund your loan, essentially investing in your loan.
- Borrow from friends or family. If you want to preserve the relationship, care must be taken here. Take the time to fill out a “contract” detailing how much was borrowed, what the interest rate will be if applicable, what day you will pay each month, and how much you will repay monthly. Then, make sure you make the monthly payments on time.
If you are in the position where you need money quickly, consider using one or more of the strategies above. If you are taking out one of these loans, make sure you completely understand the terms of the agreement and, most importantly, that you have a plan for paying the debt off so you can rid yourself of this debt as quickly as possible.
Meanwhile, if you don’t have one, consider starting a small emergency fund to help protect you in the future from unexpected expenses. Even contributions as nominal as $5 or $10 a week can slowly grow your emergency fund. In addition, every time you have an extra windfall such as a work bonus, overtime pay, or a tax refund, consider funneling that money into your emergency fund too. Then, just be sure not to use the emergency fund for any purpose other than a true emergency. With diligence, the next time you have an emergency, you will be able to draw some or all of the money from your own savings.