Four Ways To Avoid Using Credit When You Need Extra Cash

One thing you can usually count on no matter what state the economy is in is emergency situations happening to most average-income Americans. Or even if it isn’t emergencies or hardships they run into, it still might be situations where they need to buy things when their budget may not allow it. If you’re in that situation, you may want to avoid turning to loans or credit cards to pay for your expenses.

Credit cards can help, but getting in the habit of using them for expenses that exceed your budget can rack up debt and hurt your credit score, and your debt situation could be even worse if you turn to short-term loans like payday loans and installment loans. So what are better ways to do this?

Build An Emergency Or Special Expenses Reserve Fund

Many people believe they can’t build a savings fund because they don’t have enough of an income to do so. But the truth is all it might take is just setting aside $10 or $20 each week into a fund that will be ready to use at the time you need most. You could have an automatic transfer set up in your bank account such as having multiple savings accounts open including one for emergencies.

The amount would automatically pull from your checking account and stick it into savings so that when you’re ready to use it, it will be there waiting for you. Just remember that federal law only allows you to withdraw funds from a savings account six times per month.

Take On An Extra Job Or Side Hustle

A little more income can always be achieved no matter how you do it. If you don’t work full-time at your regular job and don’t have real high wages, you should consider a second job to increase your income. Even if this is only temporary, it can help you get ahead on savings.

If certain obligations such as taking care of your family prevent you from getting a second job, you could still get a side hustle. This could be physical work in your local neighborhood, such as cutting grass or removing debris for your neighbor, or you could do an online gig.

Extra money could be earned online from tasks as simple as filling out surveys or completing writing tasks. The bottom line is: there are many extra tasks out there that you can use to add to savings, and some are even fun.

Arrange To Borrow Money From Friends Or Relatives

While borrowing from immediate or extended family members is not the first thing you want to do, sometimes you’re better off doing that than trying to borrow it in other ways. If you’re concerned about borrowing and making sure they are repaid, you could make a signed loan agreement with them explaining how and when you will pay them back, and they may be willing to forego charging you interest.

What’s even better, in today’s world, you don’t have to be located close by those who loan or gift you money to receive it. If you’re getting help from a friend or relative who lives long distance, they could send you a money order or even make an online transfer.

With a money transfer app, you could receive funds and even send money online when you’re repaying those you’re borrowing from. This saves both you and them the hassle of having to send checks or money orders in the mail and wait for them. Plus, it can be more secure since you could have funds sent directly to your bank account with a transfer app, or pick them up in cash at an agent location.

Check On A Few Alternative Sources For Money Borrowing

If you need to borrow without hurting your credit or going into debt, you could consider a few alternative borrowing options. If you have any belongings that are worth something that you feel you could borrow against, you could take them to a pawn shop and get a small-dollar loan from them.

Pawn loans usually are quick and not high interest compared to payday loans and installment loans; but if you drag out paying them off you could still rack up interest charges that can add up over the long-term. The other downside is that you can usually only borrow about maybe one-third of your items’ total value, and they’re stored at the pawnshop as collateral which also means if you don’t pay back the pawnshop on time, they can put your items up for sale.

Another way to borrow money is through a payroll advance or a 401k if you have one. A payroll advance is where your employer allows you to effectively borrow money that you’ll be paid in the future, and amounts will be deducted from your future paychecks to pay it off. If you have a 401k plan and have a lot saved up in it, you can usually make a short-term withdrawal from it, but you will need to replace money you borrow to avoid an IRS penalty.

At the end of the day, there are always other ways to get extra cash without having to sink your credit card into high expenses. Having someone send money online to you may be the best way to go if you’re on a time crunch. You may want to make sure if they do this that any money transfer app they use is simple to understand.