When an unexpected expense appears, many people find themselves in a bond. In fact, a recent Federal Reserve survey found that about half of respondents said they would have to sell a membership or borrow money to cover a $ 400 emergency expense.
The solution is, of course, an emergency fund. Even $ 500 in the bank can get you out of a pinch; Having three to six months of expenses is even better. (See “How to build an emergency fund”). Having that kind of money available means that you can survive without pledging valuables, sell your blood or rely on the generosity of a friend or relative.
It takes time, discipline and extra money to build that cushion. Meanwhile, here are strategies to make money fast today, increase your income continuously and cut your monthly spending. Combined, they will help you stay out of these kind of links in the future.
1. Sale of old cell phones. There is a good chance that you are sitting in cash here: A study published last year found that half of consumers have at least one old cell phone piling up dust. You can sell your old phone at sites like Swappa and Gazelle, but to get cash today, an ecoATM is your best bet. Consider selling old MP3 players and tablets, too.
2. Sell your unused gift cards. In 2015, an estimated $ 973 million in gift cards was not used, according to research and consultancy CEB TowerGroup. Most online gift card exchanges take a few days (you have to send the card, then expect a check or direct deposit), but Coinstar Exchange offers instant cash for cards valued at $ 20 or more. You will get a little less – the company pays up to 85% of the value of the card, while sites like Cardpool pay up to 92% – but quick money could be worth it.
3. Paste something. As a way to borrow money, pawn shop loans are not great. But they are quick, and if you find you can not afford it, the pawn shop simply keeps the item you used as collateral. That is much better than the ruined credit and the calls of the debt collectors. You can often sell directly to a pawn shop, too, instead of borrowing against an item. Jewelry, musical instruments, firearms and modern electronics are better.
4. Work today to pay today. Googling that phrase appears without scarcity of results, some legitimate, some not. There are companies, such as LaborReady, LaborWorks and LaborFinders, that can help you locate your jobs immediately, and you will be paid at the end of the workday.
If a company like this is not available in your area, try Craigslist jobs or concert sections, which often have similar publications for short-term work in food, cleaning and general labor services.
5. Community Loans and Assistance: Local community organizations can offer loans or short-term assistance to help with rent, utilities or other emergencies. NerdWallet has compiled a database of payday loan alternatives available to residents in nearly two dozen states. Local churches may make small loans at very low rates. Community centers and non-profit associations in your area can also offer small loans.
6. Bill abstention: Some creditors like utilities or cable television companies do not charge interest. Find out if they will accept late payments. Use whatever money you save from not paying those bills to cover emergency needs. If you can not pay consumer debts like auto loans or mortgages, explore your options with the lender first before resorting to high rate toxic loans.
7. Payroll Advance: Ask your employer for a cash advance on your salary, which generally does not cost you any fee and is refunded by deduction. Some companies also offer low-cost loans to workers in crisis situations. You might consider ActiveHours, an application that offers workers the reimbursed advances in a lump sum on interest-free payday, but does ask for a donation and requires access to their bank account and worksheets.
8. Borrowing from Retirement Accounts: A 401 (k) loan or IRA is not without risk. You can borrow from your IRA once a year if you put the money back within 60 days. If your employer allows 401 (k) loans – not all do – you can usually borrow up to half of your account balance, up to $ 50,000, and you have five years to pay for it. However, if you do not make payments for 90 days, it is considered taxable income. And if you quit or lose your job, you usually have to pay the 401 (k) loan soon after.
9. Borrow from life insurance: If you have a life insurance policy that has cash value (sometimes called permanent life insurance), you can borrow against it and have the rest of your life to pay for it. If you do not pay, the insurance company subtracts the payment money from the policy when it dies. You can not borrow against a term life insurance policy, which is the most common type.
10. Credit Card Cash: If you have a credit card and the account is in good condition, a cash advance credit card is a much less expensive option than a payday loan. You will pay a fee, typically around 5% of the borrowed amount, plus interest, which can be around 30%.
11. Look for an alternative payday loan. Some credit unions offer small short-term cash advances known as Alternative Payday Loans, or PAL. Federally funded credit unions can not legally charge more than 28% of APR on these small short-term loans. That rate can not be called low cost – but it is much better than payday loans, which have three digit APR.
12. Take out a personal loan. Some lenders may finance a personal loan in one day; If you have good credit, you will probably have many options. If your credit is a challenge, you will need to find a lender who not only offers fast cash, but also accepts bad credit. The bad credit rates through conventional lenders exceed 36% APR. You may find other lenders offering quick financing without a credit check, but you will pay three-digit interest rates. Do not fall in love with her.
13. Rent a room. Sites like Airbnb are not just for people who have vacation homes to rent when they are not using them. Many of the ads on the site are for extra rooms – or even shared rooms – in the owner’s home, which means that you could stay in the place while you bring some cash, especially if you live in a reasonably desirable. (Check local ordinances to make sure short-term rentals are allowed.)
Creating a list on the site is free; There is a 3% service charge when making a reservation. You can easily estimate how much you can do on the Airbnb website. For an example, the site estimates a one-week private rent in relatively rural Staunton, Virginia, could fetch $ 725. The service frees payment to the host 24 hours after guests sign up.
14. Moonlight like a dog sitter. Technology is on its side here, too, with sites including DogVacay and Rover that match pet owners with dog sitters and hikers. You can choose to host the dog or stay in the owner’s house (and – here is an idea – rent your place through Airbnb while you are gone). Rates are between $ 20 and $ 60 per night in most areas, although they may skew more or less depending on the location and amount of work involved.
15. Become a pilot of delivery or delivery. These are jobs that you can do at night or on weekends, using your own car (and, unfortunately, your own gas). Companies like Uber and Lyft match people willing to pay for a ride, and delivery services like OrderUp and Postmates pay you to deliver takeaway food and other items. How much will you do? Here is a look at what the Uber and Lyft drivers win in various cities; The range seems to be $ 10 to $ 15 per trip. OrderUp says its drivers earn $ 20 per hour, and Postmates boasts $ 25 per hour.
16. Lower your insurance premiums. One of the dirty secrets of the car insurance industry is that premiums for the same driver for the same coverage can vary by the hundreds of company dollars to the company. Each company does its own math; That’s why it’s worth comparing car insurance quotes.
If you like your carrier, it may be worth your time to review the dozens of discounts you may have available. You can get a 10% discount or more for everything from getting good grades to completing defensive driving training for at least three years without an accident.
The same goes for homeowners insurance: Purchases can save 10% to 15%, as do discounts for things like having a home security system, staying free of claims or being a non-smoker . And many insurers offer discounts to have both car and owner or tenant policies with them.
17. Consolidate your debt. If you are struggling to keep up with multiple debt payments, you may be able to consolidate those balances – from credit cards, medical bills, store financing or other charges – and reduce your payments with a personal loan. There are even some lenders who can finance the loan within a day. Refinancing a $ 5,000 worth of debt from a 10% interest rate to an interest rate of 5% could save more than $ 800 in interest over the life of the debt.
If you have a good credit score, you can make a balance transfer of high interest rate credit card debt into a new card with an introductory 0% interest rate. Just make sure you can pay the balance before the balloon rate at the end of the introductory period.
18. Refinance your student loans. Borrowers are now benefiting from low interest rates and a competitive private student loan refinance market, and there are refinancing options available for most credit ratings. It is worth checking if a refinance could save money (especially when the average borrower through NerdWallet’s refi platform saves more than $ 11,000).
19. Change your cell phone plan. If you value the money in your pocket on a luxury phone, look at cell phone providers who are offering rock rates these days. FreedomPop offers basic voice and data service for free. The catch with these services is that they often have to buy a definitive phone, or bring their own. So maybe you do not want to sell that old phone yet. You can easily find a prepaid cell phone plan for $ 30 a month or less as well.
Payday loans are often used by people who are in a financial bind and looking for temporary relief until their next paycheck, like many government workers who were furloughed due to the government shutdown this week. In most instances, this option is exercised if no other immediate resources, such as credit cards or funds from a savings account, are available.
How Payday Loans Can Affect Your Credit Score
In the event that the post-dated check you provided to the payday lender does not clear the bank and you default on the loan, your credit score could take a hit, unless you have another source of funds available (or arrange a payment plan or extension) to cover the balance. Defaulting on a loan often results in the debt being sold to a collection agency and reported to each of the three credit bureaus. Some lenders even go as far as filing lawsuits, which will also show up in the public records section of your credit report if the judge rules in their favor.
What If You Can’t Repay?
If you have taken out a payday loan and realize prior to the due date that you will be unable to remit a timely payment in full, contact the lender immediately to request a payment plan or make other arrangements. Although this will add more interest and fees (which can make the loan even harder to pay off), it prevents the loan from going into default and damaging your credit score for the time being.
On the other hand, if you are considering taking out a payday loan, be sure to exhaust all other remedies available before moving forward. Payday loans are often accompanied by excessive finance charges and fees, which can get you deeper in debt if you repeatedly use them to bail out when financial emergencies arise.
Therefore, it is best to consider the following alternatives before turning to a payday loan:
If none of these options work for you, be sure to only borrow as much as you can repay.
You should also work towards achieving financial stability so that you can rely on your emergency fund when unexpected problems arise.
Don’t Ignore Your Credit
You may find it difficult to face your credit while you’re having financial difficulties. However, it’s important as ever to stay aware of your credit during times like this so you can deal with any potential problems — including errors, collection accounts or signs of fraud — that can show up on your credit report. It’s also important to keep an eye on your credit score, which can indicate a problem with your credit.