What do you do when you need money but you don’t have anything in savings? A student loan that has recently come out of forbearance, a car accident with a high insurance deductible, lifestyle change like a pregnancy that kept you out of work, a creditor ready to sue you for unpaid balances, or even the reduction or loss of income can create a web of financial trouble. Getting out of trouble will require a combination of informed decisions.
When money is short the first thing most think of is borrowing money by applying for a loan. There are several types of loan options to choose from, each providing their own set of benefits depending on your financial circumstances. Some of the more common types of loans when you’re in a financial jam include:
- Payday loans – As the name implies, payday loans are loans that are offered to people who need to cover expenses between paychecks. Although the interest rates are through the roof, it can provide consumers with short term relief to take care of their money matters. As long as you have the money in 2 weeks, this is a quick solution that works.
- Line of Credit loans – If you’ll need more time to pay back your loan or perhaps you may need to borrow more frequently, applying for a line of credit online could be a better option. A line of credit is a financial account in which customers are approved for a certain amount. Consumers can use as much or as little of the money they want and repay it over time. Products like this are a type of installment loan that let you know up front what your scheduled payments will be.
- Personal Loans – For those with good credit, collateral, and a decent paying job, applying for a personal loan can work. Applicants can receive several thousand dollars with lower interest rate. However, personal loans can be harder to be approved for and take more time to receive so if it’s an immediate issue this may not be your best option.
Kicking Old Habits
If money keeps coming up short, it essentially means it’s time to do some real investigating. More times than not, continual financial issues are the direct result of poor money management. It may be time to review some of those old spending habits and kick them to the curb. Some common spending habits that could ruin your finances include:
- Eating out
- Buying coffee
- Big-ticket purchases
- Charging everything to a credit card
- Not paying bills on time
- Bouncing checks
- Using the wrong ATM
- Not saving
- Not living on a budget
Earning More Money
If you’ve kicked your bad habits and still can’t seem to have enough money when you need it, it is quite possible that you need to earn more money. Increasing your income with a side hustle or part-time job can help balance your budget and keep you out of financial jams in the future. Here are some popular ways to earn extra money on the side:
- Answer surveys for cash
- Write blog posts
- Develop websites
- Manage social media
- Sell products (Avon, Mary Kay, etc.)
- Sell your own belongings (i.e. yard sale, cash for gold, cash for cars, etc.)
There’s no denying that financial trouble can arise when you least expect it. The best thing to do is remain calm and consider the above-mentioned tips. Decide if you need to borrow, which lending option is best suited for you. Then work on the problem by kicking bad spending habits and incorporating side hustles to bring in more cash. With time, patience, and practice, you should have no trouble digging yourself out of a hole and staying on top of your finances.