In the 2005 film Fun with Dick and Jane, character Dick Harper turns to robbery to make ends meet after losing his job. Harper's response to his financial emergency is designed for laughs, but the desperation that motivates him is no joke.
A recent AARP survey found that nearly half of adults aged 30 or older faced a surprise financial setback in the last 12 months. Respondents cited feeling stress, anger, and sadness as a result.
The median cost of these financial challenges ranged from $3,000 to $4,000, with higher numbers for households earning $75,000 or more. And two out of five respondents who dealt with financial emergencies estimated that recovery would take six months or more.
The survey also revealed some tactics that respondents used to get through these financial setbacks. More than 90% trimmed their household expenses, 64% withdrew money from the bank, and 62% delayed bill payment.
But what if you do all of those things and still don't have enough money? Here are six ways to raise quick cash to get through a financial emergency.
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1. Ask family for a loan
A loan from your aunt may sound like the worst idea ever. But if she has extra cash and you're willing to take the commitment seriously, it might be a win/win. The success of this strategy hinges first on open communication and then on your ability to keep up with the payments.
You'll want to explain your situation and pitch your relative with a specific proposal. This should include how much you'd like to borrow, the interest rate you'd pay, the monthly payment amount, and the length of repayment. Use a loan calculator to crunch the numbers.
Then, be open to negotiation. If Aunt Sally has all her money tied up in 4% tax-free bonds, for example, be prepared to pay at least 5% or 6% so she feels good about the deal.
2. Use credit cards
A credit card can finance your emergency, too. If you have great credit, see if you can open a new card -- the best credit cards in this situation offer a 0% interest purchase or balance transfer offer. Then make regular payments to pay off the balance before the 0% offer runs out.
If you don't have any 0% offers coming your way, keep the new debt separate from your other balances. That way, you can more easily track your repayment progress.
3. If you own a home, get a home equity line of credit
Home equity lines of credit, or HELOCs, tend to have low interest rates because they're backed by the equity in your home. And they'll typically have flexible repayment options, including interest-only payments. The bank will probably order an appraisal on your home, but the rest of the account-opening process should be fairly quick and painless.
If time is a factor, you could charge the expense to a credit card and then transfer it once your HELOC is approved. And while you can make interest-only payments to your HELOC, don't. Trim back other household spending, if needed, so you can pay off this new debt as quickly as possible.
4. Sell your old electronics
The iPhone 5 in your desk drawer may actually be worth something. Same goes for your old PC. A quick internet search for places to sell your old electronics may reveal many options, including Decluttr and Buyback Boss.
You won't raise big money this way, but every dollar counts. For reference, the going rate for a 2012 MacBookPro is about $40.
5. Get a small personal loan
Websites like Prosper and Lending Club offer small personal loans that are funded by individual investors. These loans carry fixed interest rates and repayment schedules ranging from three to five years. Your rate could be anywhere from 7% to 35%, depending on your credit score and how much you need to borrow. It doesn't hurt to get a quote and then compare the rate to credit cards and your other debt options.
6. Ask for donations
Among the AARP survey respondents, the two most common types of financial challenges involved unexpected expenses, like medical expenses and loss of income. Both are very relatable situations, and your friends and family may want to help you through it. That help can be kind words at the right time, but it can also be financial in nature.
Make it easy for your support group to donate by setting up a GoFundMe page and sharing it on social media. GoFundMe, the largest crowdfunding platform, has raised over $5 billion since it launched in 2010.
Address the emergency, recover, then save
You don't need to live a life of crime to get through this. Tap your available credit, sell some old stuff, and ask your family and friends for help. Once you have your recovery plan in place, start focusing on saving for an emergency fund -- so you have a financial cushion in case an unexpected expense happens again.
