While most everyone plans to build up a fund for emergency needs, not everyone manages to save enough. Here are some suggestions to find cash fast.
Where to Find Cash Fast in an Emergency
Everyone hopes to avoid a financial emergency; yet, recent times have found more Americans who have experienced a panicky moment (or months) when the bills are piling up faster than the income to pay them.
For seniors who own a home, one cash flow option can be a reverse mortgage. Comparing quotes from reverse mortgage lenders can provide you with a good idea of how much can be borrowed to boost your household income. Reverse mortgages are available to seniors age 62 and older. The amount which can be borrowed depends on the age of the homeowners and the available equity in the home. Proceeds can be taken as a lump sum, a line of credit, or in monthly installments.
In addition to investigating the reverse mortgage option, an article in Kiplinger's Personal Finance magazine has some other suggestions for families facing financial crisis.
Start by selling assets in a non-retirement account, so you can avoid early withdrawal penalties.
Investors can borrow up to 50% of the value of a taxable investment account, but keep in mind that a decline in your account can increase the loan-to-account-balance ratio beyond the 50% limit. If you are unable to deposit money into the account when you receive a margin call (when your account goes beyond that 50% limit) you may have to sell assets in your portfolio.
Home Equity Loan
If you are 62 or older, you may prefer a reverse mortgage as a way to access your home equity. Younger homeowners can apply for a home equity loan, which often requires 20% equity or more in the value of your home and a good credit score.
Research Government Aid
Some consumers may be able to apply for a low-interest government loan or other financial aid by going to www.usa.gov and selecting the "benefits and grants" option.
Increase Take-Home Pay
Readjust your tax withholding if you are fairly certain that you won't owe taxes.
Cash Convenience Checks
Use the convenience checks from credit-card companies, especially if you know you may be able to pay the money back soon. But be careful to make your payments on time, paying even a day late could result in an increased annual percentage rate.
Borrow from Retirement Accounts
Most 401(k) rules allow you to take a loan against your own account, while Roth IRA's allow penalty-free withdrawals.
Borrow from your whole life insurance policy, but know that any unpaid loans against cash value may be reduced from the insurance benefit your beneficiaries receive.
Consider borrowing from peer-to-peer lending sites like Prosper.com or LendingClub.com.
Family and Friends
If you have a family member that is willing to loan you money, you might consider this option. Even if you are borrowing from family or a friend, you should treat such a loan as a business transaction and set up a formal loan agreement
Have a garage sale or consider selling valuable possessions.
Michele Lerner is a freelance writer with twenty years of experience writing articles and web content for newspapers and magazines on topics related to real estate, personal finance and business. Her clients include The Washington Times, Bankrate.com, Urban Land Magazine, NAREIT's Real Estate Portfolio and numerous Realtor association publications. Michele's first book, "HOMEBUYING: Tough Times, First Time, Any Time" is available now at Amazon.com or from www.MicheleLerner.com