What to Do If You Need $ 100, Fast
A new Bloomberg poll shows that nearly half of Americans will struggle to afford $ 100 emergency assistance, such as a speeding ticket, medical bill, or other unforeseen expenses. Consider that perhaps this says less about the financial habits of Americans than it does about our junk economy .
Stop Blaming Your Bad Money Habits
People are quick to judge everything, but money seems to kill empathy faster than any other topic. Huge student loan debt? You acted stupidly to go to college . Having trouble paying your medical bills? Shouldn’t have bought an iPhone . No job? You must be lazy.
None of this could have anything to do with the fact that for many years wage growth remained unchanged and the labor market was volatile. When asked how they are paid, a quarter of the respondents answered: “it depends on the week.”
A Bloomberg poll also found that 28% of respondents are worried about being able to pay as little as $ 10 in an emergency. For now, are we really still going to blame the avocado toast?
However, if you are one of the many who are struggling to afford a $ 100 emergency, you need an emergency fund more than anyone. The problem is people accuse you of bad financial habits, which completely discourages you and probably only forces you to give them up entirely – don’t do it! Here is some unsubstantiated information about what you can do when you have no money and an emergency occurs.
Best and Worst Emergency Financing Options
Let’s say you received a speeding ticket and absolutely nothing was saved. This usually happens when people make desperate decisions that can push them into a downward spiral of debt, which usually leads to more desperate decisions and increased debt.
Here are the worst emergency financing options:
- Loans to paycheck: a sky-high interest rates and commission loans to the salary – it is the notorious debt trap , and probably the last place you want to apply, especially if your income changes weekly. One late payment and you screwed up.
- Debt Settlement t: This is not always a debt trap, but it certainly can be. ClearPoint Credit Counseling Solutions explains that this is “a form of debt relief that financial experts consider extremely dangerous.” Debt repayment usually involves commissions and hard contracts – if you miss a payment, you could lose all of your money, and none of it will go towards paying off your debt.
- High Interest Credit Cards: This is probably a slightly better and less predatory option than the one described above, but only slightly. Skip the payment and you’ll be hooked on fees and interest. However, some credit card companies are willing to partner with you and may lower your monthly minimum so you can at least avoid late fees.
And here are some of the better alternatives:
- Peer-to-peer lending: Sites such as LendingClub and Prosper connect borrowers with ordinary people who lend their money so that they can earn interest on it. As NerdWallet explains , your loan is funded by individual investors, and the interest rate is determined by the risk they are willing to take. The lender processes documents and payments.
- Credit Union Loans : Many credit unions offer short term loans specifically designed to help people going through difficult times. The terms are usually much better than payday loans and they also consider candidates with bad credit. “Lending to credit unions has traditionally been the heart of the credit union movement,” Samantha Paxon, director of marketing and experience at CO-OP Financial Services , told us. “Individual credit unions offer loans at lower rates than banks because they are owned by members — people who help people; interest rates are lower because it is motive, not profit. “
- Small dollar loans: through a program of small dollar loans FDIC, some banks are offering customers “affordable” small loans without fail. NerdWallet explains it more , but generally “affordable” means that interest rates can’t go higher than 36%, which is still a lot, but much less than the 200% interest rate ( considering the fees they charge ). get a payday loan.
Seriously, at least stay away from payday loans.
Why do you need an emergency fund
Ultimately, of course, you will need a contingency fund. Easier said than done, but consider this: An emergency fund gives you power and control not only over your finances, but over many other aspects of your life. (Here is the suggested reading: The Story of a Grant Fund .) When you have accumulated this money, you are less likely to make a rash and desperate choice. There will be a respite in your life this time.
If you need to start an emergency fund from scratch, it’s best to start small. ( This is how I did it . I’m not saying that what worked for me will work for everyone else, but it might help.)
Most experts recommend saving three to six months in living expenses, but if you’re struggling to survive, it probably seems like a pipe dream. Instead, make that $ 100 your goal and look for ways to save a few dollars here and there, wherever you find money. This could mean working overtime, selling certain items, or looking for ways to save money on each of your monthly bills.
Ideally, you keep your emergency fund in a separate savings account so you can’t touch it, and while some banks require a minimum balance to keep your account open, many don’t. Some of them are Ally , Discover Bank, and Synchrony . Best of all, these banks don’t charge a monthly commission.