Do you have an emergency fund? Many people don’t. Even though we all know it’s a good idea to save money to create an emergency fund, many of us are in a situation where we just can’t afford to set a lot of money aside each month.
And when an emergency arises, we’re unsure how to pay those unexpected bills.
Fortunately, there are different ways to solve this problem. Here are a few examples of what to do if you need money urgently so you can choose the best solution for you in your situation.
1. Try selling some of your belongings
Suppose you have a lot of stuff you don’t need. In that case, you might be able to sell some of it to earn some extra money. Think about clothes and jewellery you never wear, pieces of furniture that are just collecting dust in your basement, or electronics you don’t use anymore.
Whether you want to sell some of your belongings online or through a garage sale, you can earn some funds quickly.
2. Earn some money with odd jobs
If you have nothing valuable to sell, you could make money by taking on odd jobs.
You could offer your services to your neighbours who might need a babysitter or someone to walk their dogs or mow their lawns. You could occasionally become a driver for a ride-sharing service or even do some freelance work online.
If you have plenty of time on your hands, you might be able to earn enough money to pay your unexpected bills.
3. Ask for an advance on your salary
If you already work full-time and don’t have time for odd jobs, see if you could get an advance on your salary. Depending on your employer, you might be able to get either a percentage of your next paycheck or the full amount.
But of course, if you receive all of your next paycheck in advance, you will get nothing when payday comes. This option might not be ideal in your situation.
4. Get a payday loan
If you can’t get a salary advance from your employer, you could consider getting a payday loan. Payday lending companies typically offer payday loans. Getting one could allow you to borrow as much as $1,500.
Payday loans have higher interest rates than an employer’s salary advance. However, they allow you to get the money you need almost instantly, making them a convenient option.
5. Get an emergency loan
An emergency loan is similar to a payday loan, as it requires no collateral, and you can get one even if you have bad credit. They are convenient since you can apply for one online.
However, emergency loans also have high-interest rates and short repayment terms. If you apply for one, you have to make sure you’ll be able to fully repay it when the time comes.
6. Get a P2P personal loan
If you have good credit, you could apply for a P2P personal loan instead of an emergency loan. A peer-to-peer lending platform allows you to borrow money from an investor without going through a bank.
A P2P loan generally has low interest rates, although you might need to make higher monthly payments than other types of loans.
7. Borrow money with a Home Equity Line of Credit
If you urgently need a lot of money, you might want to consider getting a Home Equity Line of Credit or HELOC. This is a secured form of credit for which a lender uses your home as collateral.
You could then access up to 65% of your home’s purchase price or market value. If you get approved, you will benefit from low-interest rates. However, you could risk losing your home if you can’t repay the borrowed money.
8. Withdraw from your Tax-Free Savings Account
If none of these options are appealing to you, and you’re still wondering what to do if you need money urgently, you might want to withdraw some money from your Tax-Free Savings Account if you have one.
Withdrawing some funds from it will not cost you anything. But be careful, because if you do it too often, you might have no more savings.
9. Consider borrowing money from your friends or family
Finally, if you only need to borrow a few dollars, you could borrow them from a friend or family member.
But be cautious if you choose this option. If ever you can’t pay back what you have borrowed, or if you can’t pay it back quickly enough, you might strain your relationship.
Be sure you don’t let money issues create tension between you and a loved one.
