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Find Extra Cash When You Need It

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With careful planning and resourcefulness, you can find the funds you need—without hurting your long-term financial situation.

To obtain the money you need, start by looking at your savings. “The biggest thing that I talk to my clients about is the importance of emergency savings to cover those cash crunches when things happen,” says Sophia Bera, CFP® and founder of Gen Y Planning, a financial planning firm based in Minneapolis, Minn., geared toward people in their 20s and 30s.

However, if your reserves haven’t been built up yet, there are other ways to find cash quickly. 

1. Trim the fat from your spending
Start by cutting back on discretionary spending, such as eating out or shopping for clothes. Next, examine your finances with a fine-toothed comb and figure out the less-obvious places where you can cut back. For example, consider limiting bulk purchases at wholesale and big-box retailers. Although buying in bulk can save you money in the long run, in the short-term it’s more expensive.

2. Pad your paycheck or pick up extra work
Bera suggests contacting your employer’s human resources department to change the withholding amount for taxes. For example, if you normally receive a big tax refund in the spring, consider adjusting your withholding so that you see more money in each paycheck, rather than waiting for the lump sum.

You can also boost your income through part-time work. Perhaps you’ve gained valuable skills at your full-time job. Leveraging those skills could earn you a consulting or contractor role.  

Beyond a side job, think about ways you could generate passive forms of income. For example, taking on a roommate by renting out a room in your home.

3. Ask friends or family for a loan
If these steps haven’t yielded all of the money you need, asking friends and family for a loan might be your best option. Transferring money between individual accounts is easy with online services such as Popmoney or Western Union® Money Services.

If you go this route, make sure all parties are on the same page. A written and signed contractual agreement can ensure that everyone has similar expectations. And being open and realistic about your ability to pay back a loan—versus accepting it as a gift—can prevent hurt feelings or strained relationships.

Taking out a low-interest loan may also be a good option for boosting your cash reserves.

Once your finances have gotten back to normal, review your spending patterns and see if you would benefit from making changes to your financial habits. “I think it has a lot more to do with habits than people realize,” Bera says. “Think about what habits you’re currently engaging in and think about how you can replace them with other positive ones.”

This content is general in nature and does not constitute legal, tax, accounting, financial or investment advice. You are encouraged to consult with competent legal, tax, accounting, financial or investment professionals based on your specific circumstances. We do not make any warranties as to accuracy or completeness of this information, do not endorse any third-party companies, products, or services described here, and take no liability for your use of this information.

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