When you are desperate for cash
Surviving a Cash Crisis
by Bernardine Quesada
At one time or another, we are all faced with a crisis wherein we need cash quickly.
Depending on how desperate for cash you may find yourself, the list below explores a few ways to raise money in a short amount of time. Taking into consideration that there is no savings, here are a few more ideas to consider before starving or turning to a life of crime...
1. Sell your stuff.
Look through everything you own and find things you no longer use but are still in good condition. Once you have all the items together, you can have a garage sale, if weather permits. Or, you may be able to sell certain items such as baby clothes to a second hand store, if the clothes are in good condition. Consider consigning some of your own clothes to a consignment store, but keep in mind that it can take from 60 to 90 days to get some cash in. You could also sell your stuff online on a site such as eBay, but again, it may take several days to get paid.
2. Try a pawnshop.
Previously relegated to back alleys and sleazy neighborhoods, the pawnshop is now considered a viable place to raise some quick cash. There is a pawn shop in West Los Angeles where some Beverly Hills residents drive up in their Mercedes or BMWs to pawn off fancy items for cash. One of the secretaries where I work regularly visits a pawn shop to raise some quick cash, or to even purchase gifts such as electronics and jewelry.
Everyone has jewelry or electronic equipment around the house that can be used to raise cash. The pawn shop operator appraises the item, and will loan a percentage of its value while giving the borrower a month or two to pay it back and get the item back. If you do not go back to pay off the loan, then you forfeit the item. But if you were not using the item anyway, then losing it would not be too painful.
3. Borrow money from a relative or friend.
The discomfort of borrowing money from a relative or friend can be eased by putting everything in writing. The best way to do it is by offering to pay interest on the cash, such as 5%. This rate is better than what they would get from a regular savings account at a bank, yet not as high as a credit card. This way, the loaner feels that he or she is getting something out of it while doing you a favor.
Outline the terms of the loan in the loan agreement, have both parties sign in front of a Notary. By all means, pay the loan back as soon as you can or risk losing your relationship.
4. Think about all the money you may have left as a deposit.
Many utility companies require an initial deposit when you first set up an account, especially you have bad credit or no credit history. In any event, this money is yours after 12 months and you should call your utility company to reclaim the money. Although it's supposed to be automatically returned, the companies usually take a long time or possibly neglect to send it all together. I got $120 back a few years ago year after nagging the water utility company.
5. Check your whole house for forgotten money.
Check through your couch and you will find a lot of change. Go one step further and check through pockets of all your jackets, old purses and even old bags you have in your garage or attic. When I cleaned out my whole garage, I found a large stash of change I left in a bag with some photos--don't ask me how or why is got there, I truly don't remember! I also found $5 in the pocket of a jacket I no longer use. Every little bit helps!
6. Take in a roommate or move in with your parents.
Rent is one of your biggest expenses--why not share it with someone if you have the room. Or if you are truly desperate, move in with your parents or sibling for a few months until you get back on your feet. I realize this is one of the most difficult suggestions, but it is certainly doable if you really need the money.
Of course if you are moving in with someone you must be considerate and pitch in for chores etc, but that is a whole different subject.
7. Get a second or third job.
While considering this, do not be too picky over the type of job--any honest work should be considered, whether it's flipping burgers, delivering pizza or sweeping floors. The point is, this is a short term solution until you get "back on your feet."
8. Borrow from your 401k.
Depending on the circumstances, you may be able to borrow from your employer's 401k. This is a better option than cashing it out outright because of the tax implications. When you cash out, the plan administrator holds 20% off the total for taxes. At tax time, you may have to pay additional taxes on the money you received. However, borrowing some of the money does not carry the same penalties.
Calculator: Should I borrow from my 401(k) plan?
9. Raise the number of dependents on your paycheck.
This is not the best option, but if you need cash quickly, you can increase your dependents and decrease the taxes withheld from your paycheck, giving you a higher net paycheck. However, keep in mind that you will have to "pay the piper" at tax time which means that you will end up owing the taxes you hadn't paid monthly. Thus, you may feel like you are paying a lot of money all at once or miss your usual tax refund. I am not a tax accountant, so before you try this, call your tax accountant or tax preparer if you have one. I did try this one year, and sure enough, I ended up paying the taxes I owed at tax time, and my tax preparer strongly advised me to lower the dependents back to one or two at the most.
Think about your skills and how you can use them to provide a service to raise cash. Most people have more skills than they realize. Do you like children and don't mind babysitting? Many families in your neighborhood may need a short-term babysitter on weekends or after-hours when their regular sitter is off, or if the parents want to go to the gym. The going rate in our area ranges from $8-$15 per hour. Do you have computer skills you can use to train people on various types of software or even set up their own website? Try marketing these skills and who knows, you may end up establishing a profitable side business.
Reviewed March 2018
Take the Next Step:
- Consider starting one or more of these side gigs that can make you extra cash.
- Discover dozens of additional ways to make extra cash by visiting the Dollar Stretcher Library.
- Stop allowing debt to cramp your lifestyle and rob you of peace of mind. The TDS ebook How to Conquer Your Debt No Matter How Much You Have can give you back both. Get started today!
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