If you find yourself in a tricky financial situation, you’re not alone.
Fewer than 4 in 10 Americans have enough money set aside to cover a $1000 emergency expense. A personal financial crisis can cause stress, which can lead to mental health problems such as depression and anxiety; so it’s important to learn how to deal with an emergency cash flow situation correctly.
We’ve put together this useful guide for people who need financial help quickly. We cover:
- Why you might need money ASAP.
- What you should do in a personal financial emergency
- What you shouldn’t do in a personal financial emergency
- How to prepare for a personal financial crisis
If you feel like screaming “I need money desperately” is your only option, this guide is for you.
Why you might need money ASAP
Let’s kick things off by looking at the reasons why you might say “I need money desperately today.” In an ideal world, you’d have the money to pay for unexpected events in your emergency fund, but in reality, most people don’t.
These unexpected costs could hit you at any time:
- Health expenses – nobody knows when you or a family member may require medical care. Health expenses can cause huge financial strain, especially if you don’t have health insurance.
- A job loss – losing your job is a huge blow to your finances, and normally happens when you least expect it. Not knowing how long your length of unemployment could last also contributes to financial uncertainty and stress.
- An unexpected bill – in the colder months, heating and water bills can increase far more than we plan for because of increased usage. Other bills such as a forgotten tax return can also put huge amounts of stress on your finances.
- Emergency pet care – accommodating the regular expenses of owning and caring for a pet is one thing, but needing to shell out thousands of dollars for emergency treatment or surgery is something that most people wouldn’t be able to pay for. According to PetPlan, the average cost of a veterinary emergency is $800 to $1,500.
- Home or car repairs – insurance doesn’t cover everything that can go wrong with your home and car. For example, in the event of a car accident, you may have to pay the excess or for common repairs such as new brakes or spark plugs. Many people rely on their vehicle to enable them to get to work, so it’s important that you have the funds to get it fixed quickly. Emergency home repairs can’t wait until you get your hands on some money. If your water pipes burst, they need fixing and they need fixing now.
- Unexpected travel cost – sometimes you may need to travel unexpectedly, such as a family death that you need to buy a last-minute plane ticket for. This is a big expense that you don’t want sitting on your credit card balance racking up interest.
I need money desperately: ways to get your hands on cash quickly
Whatever the cause of your financial emergency, there are ways to get yourself out of a sticky situation that are totally safe and won’t require getting a loan.
What you should do
If you need cash and need it now, here are some legit ways to get it.
Find out if your insurance could help
Insurance is taken out for a reason. If you’re faced with an emergency medical, house or car expense, the first thing to do is check whether you’re covered for financial assistance. Here’s a few examples of how your insurance could help, depending on your policies:
Health insurance – your health insurance may help pay for medical bills as a result of emergency treatment. Most health insurances will not cover cosmetic procedures or brand new technologies though.
Car insurance – if your car has been damaged in an accident, your insurance policy may help pay for the cost of the repairs. You might also be entitled to a rental car while yours is being repaired.
Homeowners insurance – if your home is damaged in a storm, homeowners insurance might cover the repair bill. It’s worth knowing the terms and conditions of your policy as some damage such as flooding may not be covered.
Sell your personal items
You probably have a ton of items in your attic or garage that you don’t use. Why not sell them and raise cash quickly? Childhood toys, especially if you have a collection, could be worth decent money. Check eBay first to see how much they are selling for. The second hand clothes market is booming, so if you have clothes that you no longer wear lying around, sell them for instant cash. Old mobile phones, DVDs and games also sell well. A garage sale is a good way to get rid of clutter in your home and make some decent money in the process. Don’t forget to advertise your garage sale to attract more buyers.
Do some odd jobs
If you want to earn money fast, doing odd jobs in your local community could be the perfect solution for you. Task Rabbit is a same-day service platform that has more than 140,000 Taskers on their network to help people with everyday errands. From helping people move house to collecting someone’s groceries, there are lots of tasks available to help people in need in exchange for cash. To sign up, simply choose what services you’d like to offer from a list of tasks and add in your location. You will need to complete a background check and show your right to work documentation before you can start getting jobs.
Do freelance work
If you have niche skills such as strong writing or graphic design skills, there are thousands of online jobs available that allow you to earn money quickly, sometimes on the same day.
Here are a few of the best bits about being a freelancer:
- Flexible working hours – work from home around your day job and family life. You can pick your hours, whether that’s evenings, weekends or somewhere in-between.
- You control your workload – in the event of a financial crisis, you can choose to pick up more work to cover the costs.
- Work with people all over the world – freelancing is an international business so there are plenty of opportunities to work on exciting overseas projects.
- It has the potential to make lots of money – if you make a good name as a freelancer, there are limitless possibilities on how much cash you make.
To find your first freelancing jobs, you can create a profile and apply for jobs on freelance job sites such as Freelancer and Upwork. It’s also worth looking on regular job sites for suitable listings. Use your social media platforms to search for freelance opportunities and make some contacts in the industry. Search for companies that are looking for freelancers and follow agencies that you could work for. Google is another useful tool that can help you find good freelancing opportunities. Don’t forget to ask your clients for recommendations. Word of mouth is one of the most effective ways to land new freelancing work.
Using invoice apps for freelancers will help you create invoices quickly, automatically send them to clients and allow them to pay you directly without going through a long, manual process. Some apps even let you automatically follow up on outstanding payments without contacting the client directly. Bonsai, FreshBooks and Honeybook are all good options to try. Some freelancers collect payment before doing the work, but most will agree to be paid once the task is completed. Whichever one you decide, make sure you agree with the client upfront so you can get paid as quickly as possible.
Sign up for free apps that give you money
If you find yourself thinking “I need money desperately”, there are legit apps that give you cash in exchange for shopping online or playing games. Here are a few of the most popular ones to try.
1. Swagbucks pay its members to complete surveys, play games, browse the internet, do some online shopping and watch videos.
2. Survey Junkie asks users to share their opinions on products and services by completing online surveys in exchange for dollars.
3. InboxDollars works as an online rewards community that pays members to complete simple tasks such as watching videos, playing games or answering surveys.
4. MyPoints offer a $10 Amazon or Visa gift card when you sign up and make a qualifying purchase at eligible stores. You can also earn cash for answering surveys and playing games.
5. Slidejoy pays you cash just for using and checking your phone. Sound too good to be true? Well, it’s a genuine way to earn some quick money by basically renting out your lock screen for cash and gift cards. Every time you check your phone, you will be shown an advert or news story. All you need to do is click on it to learn more or see another promotion.
Get cash back on your essential purchases
Even when you’ve got a financial crisis, you still need to buy essential items for yourself and your family. Cashback sites allow you to earn money back when you shop, which makes your money go further and allows you to cut back on your grocery budget and use it for your emergency. Instead of shopping via a retailer’s site, you buy your products through a cashback site such as ShopAtHome or Coupon Cactus, and they will put some cash back into your account once you’ve made your purchase.
Exchange gift cards for cash
Unwanted gift cards can pile up in your purse or bedside cabinet over the years. Instead of letting them go to waste, cash in on them instead. How? There are lots of websites that will buy your gift cards for close to their face value. Compare what sites such as Cardpool and CardCash will offer you. You could also use eBay or Facebook Marketplace to sell gift cards for only slightly less than their balance. You won’t ever get the full 100% of your gift cards value, but it’s a simple way to get your hands on cash quickly if you have a stash of unwanted gift cards in your home.
Ok, so this method may seem a little more extreme than the others, but it’s a completely legit way to get your hands on dollars fast. Plasma is the liquid portion of your blood and is collected in the same way as a blood test, but your blood is then transferred into a machine that takes your plasma and returns your red cells and platelets back to your body. Plasma is used to treat patients with liver disease, immune diseases or patients with brain injuries or trauma. How much you get paid to donate plasma will depend on your local donation center.
Become a driver for Uber
There are some jobs that allow you to make money instantly, and being a driver for Uber is one of them. As you use your own car and fuel, there is no initial cost. Instant pay is one of the many reasons why Uber has so many happy drivers working for them. The easiest and quickest way to sign up is to download the driver app. Uber will then review your driver’s license number, vehicle registration and any required additional info which will need to be approved before you can receive ride requests and start earning. After a day of driving, Uber’s Instant Pay app allows you to transfer the money you’ve earned from the app to your bank account, which is ideal if you need cash the same day for a financial crisis.
Other benefits of driving for Uber include:
- Being able to work any time, 24/7. If you need extra cash one month to pay for an unexpected cost, you can do that. If you need to work around your day job you can also only work early mornings, late nights and weekends.
- You’re your own boss as an Uber driver. There are no supervisors or people to report to. You can set your own hours and pick the days that suit you.
- You can make more money during peak hours. If there is a high number of requests to a certain event or area, the fares that you charge will automatically go up. Once you get to understand how this system works, you can use it to your advantage and increase your earning potential.
Advertise your property on Airbnb
Do you have a spare room in your home? Make it earn some money by renting it out on Airbnb. You can create a listing for free on their website and choose how much you want to charge. Airbnb will pay you within 24 hours of a guest’s arrival, which is a pretty fast way to earn some money if you’re in a tight spot financially. You can even choose how to get paid, whether it’s via direct bank transfer, international wire, PayPal or even reloadable prepaid cards. If you really want to cash in, you could list your entire home to rent while you’re on your annual vacation.
Request a payroll advance from your employer
It may be possible to get your hands on money quickly by talking to your employer and asking for an advance ahead of your paycheck. This involves your employer lending you money that you have not yet earned, so requires a good level of trust that you will stick to your contract of employment after the payment has been made.
If you haven’t been in your current role for long, don’t be offended if your request gets turned down. Sometimes a business may have a policy that states they can’t authorize advances to employees.
So, how do you ask the big question? You could request a meeting with your line manager or write a letter if you find this approach easier. Whichever way you decide to do it, make sure you ask the question with respect to increase your chances of it being accepted.
The benefits of asking for money in this way are that it’s unlikely you will be charged any interest or fees and you won’t need to complete any credit checks.
Use a community loan
Local community organizations sometimes help provide loans or financial assistance to people who need help with paying for emergencies. Keep in mind that how quickly you get help will depend on what you need and which organizations are in your state. Proof that you need help may also be required. Whilst this isn’t a guaranteed source of help, it’s worth finding out what’s in your local area, and it’s certainly a better option than taking out a payday loan.
Borrow against life insurance
Borrowing from your life insurance policy can be a fast and easy way to get cash when you need it, although this will only work if you have a permanent or whole life insurance policy. As with any loan, it’s important to pay back what you’ve borrowed within the stated time. If a loan against your life insurance isn’t paid back before your death, the amount plus any interest that you’ve gained is subtracted from the amount that the beneficiaries will receive. Also, be careful that missing repayments could put your loan at risk of exceeding your policy’s cash value and make it void.
Ask family and friends for help
It may feel like the worst thing to do, but sometimes swallowing your pride and reaching out to people who care for you is a smart move. After all, a bit of embarrassment is much better than a ton of debt caused by high-interest rates on a loan or credit card. Being honest about your situation is the first step to take when asking family or friends for a cash loan. Only borrow as much as you need and make a plan to pay the money back that both parties are happy with.
Take money from your retirement pot
For some emergencies, the above ways may not give you enough money to cover the expense. Even though you will likely have to pay a penalty (usually 10%) for withdrawing from your retirement funds before you’re 59 and a half, this may still work out cheaper than taking a loan or borrowing money elsewhere. There are also certain exceptions where the fees to withdraw may not apply, so it’s always worth checking it out if you need to access money quickly. Before going down this route, it’s important to consider the implications of accessing your money early. For example, would you have to work longer than you’d planned, or need to live off less money once you retire?
What you shouldn’t do
Don’t ignore or deny the situation
Whilst this may seem like the easiest option, it’s certainly not the best. Pushing the problem away will not help you in the long run. Instead, accepting the issue will enable you to face up to the situation and find a way to overcome it.
The worst thing you can do in a financial emergency is panic. A positive mindset can really help to motivate you to fix your financial problems. Believe that you can sort out your financial emergency and focus on how happy you will be once it’s sorted. If you’re feeling stressed, use some stress relief strategies such as exercise, reducing your caffeine intake and spending time with friends and family to take your mind off your money worries.
Bottle up your worries
It’s really important to talk about your financial stresses so you can look after your mental health properly. Poor mental health can make earning and managing even harder so it’s important to speak to someone if you’re struggling financially. If you have children, explaining that you’re going through a tough time financially can help them understand why days out and extracurricular activities may have to stop for a while.
Take out a payday loan
Payday loans should be avoided at all costs. The short-term fix if you need cash fast is tempting, but the scarily high-interest rates will come back to bite you. A recent report also revealed that new payday lending rules could leave 12 million Americans ‘exposed to unaffordable payments’. Apart from payday loans being incredibly expensive, you can also get stuck in a dangerous repeat cycle. Payday loans are provided on the basis that you pay them back when you get paid or roll over the loan for a few more weeks. Debt can grow rapidly at these rates and leave you in a much worse financial situation than when you started. Thinking ‘I need money desperately no loan’ is a sensible approach to solving your financial emergency.
Reach for the credit card
Depending on your credit card to cover stations where you need money instantly isn’t a smart financial move. In reality, it’s just like getting a loan that you will need to pay back, with interest. Using your credit card to pay for your financial emergency will put you at risk of going into debt. If you can’t get your hands on cash any other way, it’s unlikely you will be able to pay your credit card off before the interest starts piling on. Another reason why it’s not good to use your credit card for emergencies is that you could become reliant on it. What happens if another financial emergency occurs and your credit card is already at its limit from the first emergency? As your card balance increases, so does your options.
Get a cash advance
Unless your financial situation is life or death and you’ve tried every other option, avoid getting a cash advance on your credit card. The terms of repayment will be much different from the terms of your regular credit card purchases. This means that you could end up repaying a huge amount more than you originally borrowed. It’s not worth the extra debt and stress associated with paying the money back. Racking up more debt and missing future payments due to insufficient funds will also hurt your credit score.
How to prepare for a personal financial crisis
1. Decide what’s essential
When a financial emergency strikes, you don’t want your money tied up in unnecessary subscriptions or unused belongings in your closet. Look at your current situation and ask yourself some tough questions. Do you really need those designer suits or handbags or would the money be better used elsewhere?
What are your priorities? If it’s important to you that you own your own home, could you rent out your spare room to make some money from? Do you really need a car, or are there cheaper options that you could consider?
These big questions will help you prioritize what’s important to you and make sensible cuts to free up money that could be better spent elsewhere.
2. Make a budget that includes an emergency fund
Personal budgeting will ensure that you always have enough money for the things that are important to you, and help you prepare for a financial emergency. Start by tracking your spending for 30 days so that you have a clear understanding of where all your money is going. Once you have a good grasp of your current spending habits, enter your expenses into a spreadsheet or budgeting app.
Now it’s time to decide what kind of budget you want to create. There are lots of budgeting methods to consider, but it’s important to find one that will work for you. The following two options are the most popular.
A 50-30-30 budget: 50% of your income is used for needs (rent, food, basic utilities and debt repayments). 30% is then used for wants (entertainment, eating out and monthly subscriptions). The remaining 20% is used for savings or to start and grow an emergency fund.
A zero-based budget: every dollar you earn is assigned a task such as mortgage, groceries, utilities or entertainment. Subtract all of your expenses from your income and allocate whatever is left over to a savings or emergency fund.
3. Minimize your outgoings
The best place to start when reducing your expenses is your variable costs. These are not to be confused with your wants. For example, a cell phone is most likely a need, but a 6GB data plan is more of a want.
Another way to minimize your outgoings is by keeping an eye on small purchases such as buying a coffee and your lunch every day. These costs add up quickly and before you know it you’re spending $8 a day, $40 a week without needing to.
Cancel any unused memberships and monthly subscriptions but check to make sure you don’t have to pay a fee for breaking the contract early.
One of the most important things to change when trying to reduce your expenditure is only shopping when you need to. Or, if you need to buy clothes try a second-hand store instead.
Why not put a spending ban on eating out and buying takeout coffees until your financial situation has improved and you’ve built up an emergency fund?
4. Earn some extra cash with a side hustle
If your income just about covers your outgoings, a side hustle will provide you with an additional income that can be used to meet your savings goals and grow your emergency fund. For those of you who are unfamiliar with the term, a side hustle is described as a job that you get paid for doing in addition to your main job. Popular side hustle ideas include tutoring, freelance writing and becoming a virtual assistant are all great ways to earn extra money.
Money from your side hustle is much easier to put aside because you’re not reliant on it for your regular monthly expenses.
If you want financial security, a reliable side hustle is a good solution.
5. Pay off debt
The smartest thing you can do to help you achieve financial security is clear your debt. Once you’re debt-free, you can use the money to help you prepare for future financial emergencies such as home or car repairs.
Here are a few ways that will help you get out of debt quicker:
Pay more than the minimum repayments: paying only the minimum repayments each month means it will take you a lot longer to pay it off, and that’s assuming you don’t add to the balance in the meantime. Paying more than the minimum will save you money on the interest as well as speeding up the payment process. An effective way to pay more off your debt is by cutting expenses elsewhere. For example, if you skip your regular family takeout and use the money to put towards slashing your debt instead, you will be better off in the long run financially.
Pay off the balances with the highest interest first: this may sound obvious but prioritizing your debt will help you pay it off faster. The longer that interest accrues on your balance, the more you’ll pay, so getting rid of this debt first is a smart move. This method is also called the debt avalanche method. Start by making a list of all your debt and balances, minimum monthly repayments and interest rates. Next, sort them in order of interest rate, highest first. Attack the highest interest rate first, even if it has the smallest balance.
Ask your card provider for lower interest rates: it’s worth speaking to your card provider to find out if they can lower your interest rate. If you’ve got a good track record of making your repayments on time, there’s a good chance that they will agree. Explain your financial situation with the customer service representative and that you’re looking to cut costs on your outgoings.
Consider a balance transfer: taking advantage of a balance transfer deal allows you to move all or part of your debt to another credit card with lower or 0% interest for a period of time. It’s important to note that you’re not actually paying off your debt with a transfer deal, simply transferring it to save money on interest rates. Another benefit of a balance transfer is the ability to consolidate debt from multiple credit cards and simplify your finances. Use the money you’re saving on interest to pay more off your debt and clear it faster.
Dealing with a personal financial crisis
Life is unpredictable, but knowing how to deal with a financial emergency can help you make the right financial decision.
After reading this guide you should know the best ways to deal with a situation where you need money quickly but don’t have any savings. It’s important to note that these solutions are short-term, and the only way to prepare for a financial crisis is by preparing an emergency fund and managing your money effectively. This means living below your means, eliminating debt and reducing your reliance on loans or credit cards.For the latest advice on making money, budgeting, family finances, home ownership and saving, The Finances Hub is a ‘go-to’ resource for young people who want to take control of their money.