Most people encounter some period in their life when they may be short on cash. The main thing is to quickly be able to “encash” what you own into liquid cash, or cash equivalent.
1. Hold a yard sale
This will be the best time to de-clutter, and sell what you can in your home. Look at what that is of value that you might be able to sell on eBay / yahoo auctions/ craigslist / yard sale your belongings. If you have something more special, you might be able to hawk it at your local pawn shop for some quick cash. The main thing to note is that you want volume. There might be a few special items that might give you a lot of cash, but the average household just simply has multiples of everything!
2. Provide a Service
You can also look at providing some service on something that you might already be good at. These are some ideas that can assist to bring in some extra income on the side: manicurist, mow lawns, wash cars, babysit, assistance to troubleshoot computers, gardening work, painter, web design, translation service, car servicing, wardrobe organizer, cabinet resurfacing… There are thousands of household jobs that people would be willing to pay for because your service is available to them!
3. Upcycle a product
If you are already selling a product or service, can you upcycle it and charge more? You would be providing more value, and possibly creating a new business product line category for yourself!
4. Trade down
If you own a home, a car, a boat and a mobile home, it is probably too much. You would be in a position to “trade down” into a smaller home, downsize from a SUV to a sedan, and sell the boat and RV. This would probably take some time, but would potentially net you the most amount of money.
In the long term look at these three “levers” to improve your situation more permanently::
In the short term, get your behind out there and start earning some cash. Here are some quick ideas to try and get some money in the short term.
You want something that is quick, and which will bring in cash immediately after you finish the job. – babysitting – , and clear some clutter alongside – gardening, bush trimming – temp for an agency, for desk jobs – house cleaning job, especially for seasonal demands such as in time for Christmas – if you can sew, some simple alteration work, such as hemming, pants length alteration – computer maintenance, troubleshooting, etc.
In the longer term, you want to re-look at how you can improve your earning potential, be it taking up a new training course, getting out of a sunset industry, getting a job with better prospects. You could also look at starting a side business to obtain some secondary, or passive income so that you are not dependent on one source of income, and being vulnerable to the stability of that one job.
This is a no-brainer, but if you are short on cash, you have to reduce what you spend. These are quick ideas to look at aimed at reducing your cash outlay. – look at your existing bills, and reduce any frivolous or unnecessary expenditure, such as cable TV subscription, a excessively high mobile plan, magazine subscriptions etc. Mainly you want to stop the bleed. If your subscription is already paid for, call up the company and them to stop the subscriptions when the run is ended.
Look at your daily expenditure, and realize what you can spend less on, and then cut it out. You might find it a good idea to use cash only for your daily expenses, and to cut up your credit card if you have a spending issue. – look into using an envelope system, which is cash only, to help you live on a budget. Simply make a budget, withdraw money from your account at the start of when you get paid, divide the cash into categories, put them into the labeled envelopes, and stick with it. If the cash is gone, it is gone. Zilch. Nada. No more. You could use broad categories such as “food”, “transport”, “entertainment”, “utilities”, “insurance” to begin with.
Note: before all, put aside some money for yourself first, the rest of the expenses will sort itself out. 10% is the minimum and a good place to start.
Transfer your expenses to someone else
If you’re really scratching the bottom of the pan, you have to look at some ways to tide you over, until you get on your feet. These are short term solutions, and you really need to be nicer to these people once you are in a less desperate situation.
If you are working, can your company cover any of your expenses? Such as mobile phone bills, insurance co-pay? Can you drink coffee from the company pantry instead of buying from Starbucks? Can you go to any talks where they have free buffet lunches? Is there a local charity where you could scourge a free vegetarian dinner or soup? (You could help out in exchange) If rent is a problem, could you move back with your parents for a couple of months? – could you “claim” any of the old “I owe you one”?
How to prevent this from happening again
By now, hopefully you would have suffered enough to vow not to let a cash-strapped situation happen to you ever again! Here is what you need to look into to prevent a recurrence.
Rule 1. Spend less than you earn
Rule 2. Pay off your debts, and have no credit card debts.
Rule 3. Have an emergency “peace of mind” savings stash. First off, aim for 1 month’s worth of expenses. Then, pay off your debts one by one. Then, save up for a 6 month’s worth of your net income if you are gainfully employed. If you’re self-employed, you should have a 12 month cash buffer of what you pay yourself every month.
Rule 4. Pay yourself 10% first. After all that is done, save at least, at least 10% of your income.
Rule 5. Research upon and decide on a budgeting and financial plan for yourself.