Life happens. And not always right on schedule. Worse yet,
sometimes it coughs up an expensive emergency.
If that happens, and you don't have an adequate emergency
fund, there are other places to get the cash.
How to make the best of a bad borrowing
situation
None of these options is great, or even good. But if
you must, you must. Here's a general pecking order of places
to get the cash:
1. Call in those IOUs. Think about
who owes you, and start at the office. If you have a
flexible-spending account or have incurred reimbursable
business expenses, submit your receipts. If you regularly get
a tax refund, adjust your withholding. Doing so will
immediately increase your take-home pay.
2. Sell stuff. You may be surprised how much
you can make off of stuff that's just gathering dust. Clean
house and hold a garage sale, or sell things on eBay or
Craigslist.
3. Sell your subpar
investments. Identify stocks and mutual funds (or
even CDs or bonds) that you hold outside your regular
retirement accounts. In tax terms, it's best to sell the ones
that have lost you money. If you sell at a loss, you can
offset other gains and pay less in taxes on those. But if
you've made money, prepare to pay those capital-gains taxes
come next April.
4. Put it on plastic. Credit card
debt can be a slippery slope. If you have no choice but to
run up your credit cards, come up with a payoff plan
ASAP.
5. Borrow from your home very, very
carefully. If you must, borrowing against your home
equity will probably provide you the lowest rate, and the
interest may be tax-deductible. That said, proceed with
caution. You're risking the roof over your head (aka a
secured asset) should you be unable to pay the money
back. Continued... |