Get cash quick without getting stuck in debt

By Sierra Black

Everyone needs a little extra cash sometimes. Whether your car breaks down, your cousin unexpectedly announces wedding plans, or your best suit get splashed with grape juice the day before a job interview, you're bound to find yourself getting hit with a financial curve ball from time to time.

When that happens, it can be tempting to borrow the money you need. It's best to avoid any new debt if possible, even when you're dealing with an emergency.

In some cases this applies especially if you're dealing with an emergency. If your family has experienced a job loss or a major health problem, there could be long-lasting impacts on your income and living expenses. Now is not the time to destabilize your financial situation even further with a new debt to pay off.

Borrowing money means paying interest and fees on the money you need, and it saddles with you a new monthly expense. Worse, borrowing when you're already strapped for cash can trap you in a cycle of debt.

Problems with quick cash

Most of the regular sources of quick cash come with built-in problems. Let's take a quick look at a few:

• Borrowing from your retirement funds. Not only will you pay interest on a 401(k) loan, you'll lose the opportunity to earn money on that investment during the time you're repaying the loan. That will cost you big when it comes time to retire. Additionally, many 401(k) loans require you to pay back the full amount all at once if you part ways with your current employer.
• Getting cash advances on credit cards. You do not even want to know how high the interest rates on these are. Taking a cash advance on your credit card is quick and easy, but it should be an absolute last resort. Never do this unless you have a clear plan for how you will pay it off, preferably within the month, and before your next payment is due.
• Taking out payday loans. Like credit cards, but much worse. These businesses essentially exist to trap you in debt: they charge such exorbitant interest rates, that the only way you can pay it off is to bring them your next paycheck, which they'll also be taking a large cut out of.
• Getting money from relatives and friends. If you must borrow money in a financial emergency, this is probably your best bet. Just be sure you are very, very clear about the terms of the loan. Put it in writing. To make it fair for everyone, plan to repay the money with a reasonable amount of interest.

How to find fast cash

Rather than taking on new debts, your best bet is to find other sources for cash. There are plenty of quick, creative ways to get the money you need.

• Plan ahead. The very best way to have the cash you need in an emergency is to have a well funded emergency fund with ready cash waiting in it. By saving a little in a high-interest savings account each month, you'll soon have a nice nest egg built up that can help cushion any financial blows your family takes.
• Sell some stuff. Everyone has things they don't need. You have them in your garage, in your storage areas, cluttering up your spare room or sitting in drawers. The DVDs you haven't watched in a year, the exercise bike you haven't touched since grad school, and the business clothes you'll never wear again can all be liquidated for extra cash. This won't get you money today, but it could give you cash this week. Depending on what type of emergency you're facing, selling off some extra possessions can be a fast, easy way to get on top of things.
• Moonlight. For a longer-term cash shortage, consider moonlighting with a side business or second job. Even a few hours a week of working at a side job can give you extra income to save for an upcoming trip or college textbooks for your kid.
• Find a way out of the expense. Often, we don't need to spend as much money as we think we do. Do you really have to go to that cousin's wedding? Or would a card suffice? Does that car repair have to happen this week, or can you limp through the next few weeks while you save up the cash to pay for it? Switching to a more frugal mindset will soon have you spending less, even when sudden needs arise.

Staying ahead of the game

Whatever strategy you choose to deal with your cash flow woes, your best bet is to create a well-funded emergency fund so that you can deal with any future emergencies effectively. You'll want to select a savings account with the highest interest rate, and then set some portion of your paycheck aside each month. Then when your rainy day comes, you'll be ready.