Originally Published: Nov 12, 2018. Updated: June 18, 2020
9 Things to Do When You’re Low on Cash
We all have times when we’re low and cash and need an emergency source of money. It could be for a medical emergency, car repairs, or even an upcoming mortgage or rent payment. There are many different reasons you might need cash and it can feel demoralizing at first.
Believe it or not, you have plenty of options for getting cash that you can consider if you're struggling financially. Here are nine things you could do to solve your cash crunch issue to put money in your hands when you're low on cash.
1. Reduce Your Spending
The very first thing you should do when you face a cash crunch is to take stock of your spending and find out where everything is going wrong. If you’re spending too much, then reducing that spending to the necessities may leave you with a little more cash to get you through the hard times.
The best way to analyze your spending is through a monthly budget. This will give you insights into which specific areas you might be overspending. Then, you can strategize methods for reducing spending in those areas.
For example, you might find a common theme of restaurants breaking your budget at the end of the month. Next month, try to pack your meals for the office to avoid unnecessary trips to your local eateries.
Utilize Credit Card Rewards
If you consider yourself well disciplined, it might be wise to use a credit card for your routine purchases. Many credit cards will offer rewards for spending. These rewards can range from 1% to over 5% on some purchases. This can save you money over the months, even if it's just a few dollars here and there.
2. Borrow Money from Family and Friends
You don’t have to be alone in your time of trouble. Your family is supposed to be there for you and give you support in your hardest times. When you’re having a hard time, financially speaking, your family or friends might be able to step in and give you a hand. The same holds for your friends, some of who are even closer to you than your family.
You should define if the money will be paid back to them or not to reduce any friction between family members and yourself. If you do plan to pay back your money, let them know when they should expect to receive it.
3. Take a Payday Loan
If your cash issue is one that can be solved as soon as you get your next salary but happens to be an emergency, then you can consider getting a payday loan. Payday loans are convenient and easy to access. You don’t need to have good credit, and you can pay it back as soon as your salary rolls in.
WARNING: Payday loans can be extremely risky. Do NOT request a payday loan unless you can guarantee a method of paying it back. Otherwise, you will run the risk of getting trapped in interest payments.
4. Take a Personal Installment Loan
Personal installment loans are pretty convenient and fast. You get the loan in minutes, and you pay it back in monthly installments. This kind of loan is great for when you need a small amount of cash, and you need it fairly urgently.
The interest rates on personal loans can be favorable when compared to other methods of borrowing money like a payday loan or cash advance on a credit card. You can often find rates anywhere from 5% to 12% depending on your credit score and the amount of cash you need.
5. Take a Credit Card Loan
You can also get a cash advance loan on your credit card. Credit cards are another fast and convenient way to get a quick loan. You can get it through ATMs, checks or bank withdrawals. The loan amount will be determined by the limit on your credit card.
WARNING: Credit card cash advance fees and interest rates can be extremely high. Before considering a cash advance, you should have a plan in place to pay it back as soon as possible. Interest will start accruing the moment you request your cash, so the sooner you can pay it back, the less interest you will end up paying.
6. Do a Gig
We live in the gig economy. If you have a special skill, such as coding, photography or anything you can use to perform a simple service for people, you can consider going on gig sites and doing little gigs for cash. It’s a great way to earn cash from what you’re good at.
There are various ways you can find work in the gig economy but the two most common freelance websites are Upwork and Fiverr. These websites can connect you with businesses or people in need of your services.
Not sure if you have the right skills? Here are some of the top freelance gigs available:
- Graphic design
- Web design & development
- Virtual assistants
- Legal consultants
- Many more
7. Use your Car to Transport Others for Money
If you have a car, you can consider turning it into an Uber or Lyft vehicle. This is another great way to use an existing asset to make you some money. Even better, you can take advantage of sign up bonuses when you first register to drive. These offers can range, but it is common to score an extra few hundred dollars in your first couple of weeks driving.
How much money you can make driving for a ride-hailing services varies based on your location, model of your vehicle, and the quality of your services. It is common for drivers to make anywhere from $10 to $15 per hour after expenses in most cases.
8. Sell Some Furniture for Cash
If you have old or unused furniture, you can sell it to friends, family, furniture stores, antique shops or online for some quick cash. If you sell it to friends and family, you can always buy it back in better times.
Have an old piece of furniture? Don't count it out! Instead, consider flipping your piece of furniture to earn some extra money. It can be easier than you might think and can be a very lucrative business.
9. Take Out a Home Equity Loan
If you still have some equity in your home, you can consider taking out a second mortgage or home equity loan on your home. This is a great option if you need a large amount of money. Home equity lines of credit also tend to offer favorable interest rates, especially when market conditions support it. Today (June 2020) you can score a HELOC for as little as 3.5% APR. This is considerably less than a cash advance interest rate over 20%!
Conclusion: Low on Cash? Do These Things Now!
It can be a struggle when you're low on cash and you aren't sure what to do. But luckily there are many methods of getting the money you need to keep your bills paid and lights on.
Between taking out a personal loan, picking up a side gig, or asking friends or family for some extra cash, you'll have some money in your pocket in no time.
Avoiding these situations is key to your financial success. You'll want to ensure you have a budget in place to keep tabs on your money. Check out these budgeting tips to get some help!
Do you struggle to find cash when you need it? Comment your favorite methods below!