Everyone doesn’t follow the advice to have an emergency fund for times when you need cash in a pinch. Other people get stuck needing more than they saved for. Whether your car breaks down or your water heater blows up, sometimes you need cash in a hurry. Here are some ideas to get the cash you need right away.
First off, you should have an emergency fund that you can draw on if you have an emergency. That’s the idea. For most people, a $5,000 emergency fund should suffice, but you may need more or less depending on your situation. If you have kids or own a house, you should probably have more. If you are a single renter with a cheap apartment, you may need less. At the very least, keep 3-6 months of cash on hand to cover your expenses.
Of course, if you are reading this looking to get money quickly, it is probably too late to save an emergency fund. But do start saving for next time.
If you have enough open credit available, you can pay your bill with a credit card. If you do, however, just be sure to pay it off as soon as you can. Credit cards have high interest rates. For a cash advance, most cards charge a fee, so I suggest avoiding them if at all possible.
Whenever I need to buy something expensive, I always put it on a credit card. If you pay off your bill in full every single month, you will never pay a penny in interest. The rewards can help you fund amazing trips on a budget later on.
You know that annoying friend/relative that hits you up for money? You can be that guy. If you are in a real pinch, you can try to borrow money from a friend or relative. If you do, just make sure to set a clear plan to pay it back and follow it. If you don’t, you might not be friends for much longer.
Some credit unions and banks offer personal loans, which are installment loans that do not require collateral. They have higher interest rates than traditional loans. If you own your car or home, you can also get a collateralized loan at a lower interest rate.
Getting a personal loan takes some time, so if you need money within a few days, this most likely will not work for you.
Line of Credit
If you own a home, you may be able to get a home equity line of credit that you can draw on at a much lower interest rate than most other options. While the rate is higher than a traditional mortgage, it is going to be much lower than credit cards and non-traditional loans.
Like a personal loan, this takes some time to setup, so be sure to plan ahead if you are using a line of credit to fund a big purchase.
Rob a Bank
This is probably not a good idea.
Originally posted June 10, 2012. Updated July 30, 2013. Image by MoneyBlogNewz / flickr.