- Date : 05/03/2023
- Read: 4 mins
There are many instances where one can need cash but be short on it due to multiple reasons. At that time, most people thought of taking a loan from a bank or a friend, but that added an extra expense in the future. People can be prepared for such scenarios by having emergency funds, fixed deposits, and mutual fund accounts.
Also read: How much cash is needed in a bank account?
Ways to access cash!
When you need money and you’re in a tough spot, it is easy to take out loans or sell possessions to get money quickly. However, these options can cause more financial hardship in the long run. Payday loans can come with high interest rates and fees that can make it difficult to pay them off and selling possessions can leave you without items you may need in the future. Instead, it’s best to consider other options that can help you get the money you need without putting yourself deeper into debt. Some of these other options are explained below:
1. Lending from the committee: Whenever we immediately need money, the committee serves as both a savings and a borrowing mechanism. A group of people involved in this savings plan put aside a set monetary amount monthly. One can set aside money from their paycheck monthly to be used for it. The duration for which the investment is placed in these groups is equivalent to the number of participants in the scheme. Typically, people who do need cash in a specific month engage in bidding, with the lowest bidder receiving the entire sum of the funding.
2. Having an emergency fund: Keeping an emergency fund on hand at all times for unanticipated, unprepared, and uninsured emergencies. Rightfully so, one can readily use the emergency fund that has been set up with this reason in mind if anyone experiences such difficulties. The long-term investments are also shielded from unforeseen transfers like these and the disruption of the cumulative effect by maintaining an emergency fund.
3. Profit from Unnecessary Items: If you need money quickly, selling used or old items may allow you to generate a respectable sum. One can advertise their products on well-known social media networks. Additionally, market them on online stores like eBay and Poshmark. that only sell second-hand products.
4. Borrowing Money from Family and Friends: When one needs money right away, they can borrow it from family and friends. Despite the fact that it's the finest choice for getting money fast, this comes with its own disadvantages. such as risking the relationship, being unable to pay, awkwardness, or difficult repayment terms.
5. Take out cash or utilize each of the credit cards' available credit: One can borrow the money with a credit card according to the predetermined amount of available credit. Make the bare minimum payment or settle the entire balance monthly. However, you can have to pay fees and interest if you don't make a payment on time or only spend the minuscule amount required. While using the credit card to withdraw the money is undoubtedly a simple fix, the negative effects persist for a long time. As a result, save this method for getting cash immediately until last.
6. Selling the Gold: Gold trading is a highly popular activity in India. Individuals can invest their money, so they can trade the very same gold jewelry for cash if they suddenly require cash. Contrasting gold prices with the existing markets, though, is necessary prior to selling the metal.
7. Early Withdrawal or Breakdown of Fixed Deposit: Another one of the finest investing alternatives is a fixed deposit account, in which a consumer puts a substantial sum of money for a particular period and earns interest upon that. The amount invested in an FD fund is frozen for a period of time, with no possibility of release if necessary. Although the client might choose to prematurely withdraw or breach the fixed deposit if they do need the cash right away. Many banks impose a fee of between 0.5% and 1.00% for early withdrawals from fixed deposits.
Also read: Good debt vs Bad debt!
When you're short on cash, taking out a loan or selling your assets like real estate can be the simplest way to get it. But these ways can lead to an excess burden on an individual in the future, so preparing an emergency fund, investing in committees, and having deposits are important.