We all have times when the money seems to roll right out the door before all the bills have been paid. If you’re in a tight spot now, it’s time to think creatively about how you can get your hands on more of the green stuff.
Still employed? Great! Take a look at your paycheck stub and see how much was taken out in taxes. Ideally, the amount of your pay withheld for state and federal income taxes should just about match what you end up owing Uncle Sam. If you got a big tax refund from last year, maybe too much is being withheld from your pay. That means you’re giving Uncle Sam a free loan. Stop being such a nice guy! Your company can change the amount of tax withheld if you file a new form claiming more deductions. (Just don’t try this if you had to pay more tax than was withheld the IRS charges stiff penalties for underpayment.)
Do you have life insurance policies or retirement plans? Check out whether you can take out a low-interest loan. Whole-life policies will frequently let you take out a policy loan once you have built up a cash balance. If you have money in a 401(k) plan or similar retirement plan, see what options you have for borrowing. You may also be able to withdraw money early, but watch out: you’ll pay a tax penalty unless you need the money to pay large medical bills.
Still short? Take a look in your jewelry box. The price of gold has skyrocketed lately, and your gold chains and rings may be worth more than you think. Take them to a store that buys gold and watches. There’s no obligation, and if you end up getting more cash than you thought you would, that will take the sting out of parting with them.
Do you have other items you don’t use, like an extra DVD player, camera, or collectibles? Try selling on Ebay; it’s easy and fun. First, set up an account on Ebay if you don’t already have one. Take a picture of your item, find the category it fits in, and describe it to your buyers. Most people sell their items as auction items, setting a low initial price of a dollar or so. If it’s an expensive item, you can set a reserve price so that you don’t sell it unless that price is met. Be sure to charge enough for postage and handling so that you don’t end up losing money on the deal. Then decide how long you want the item to be listed (usually a week or so), and sit back and watch the bidding! Once your buyer has paid, send the item out promptly so that you get good feedback from your buyer. Many people have had such success selling on Ebay, they actually turn it into their own small business.
If you’re faced with an emergency, payday and car title loans are an option. Use these only if you have no alternatives, however the interest rates are sky-high.
Finally, think about downsizing your major assets and going to a less expensive home or car. You need to be realistic about what you can get for your home or car in the current market, when there are many homes and larger cars on the market.
With determination and creativity, you can make it through this tough period and find yourself in a better place when the economy turns the corner.