Financial emergencies happen all the time. Whether it be a medical emergency, the loss of a job, a natural disaster, or anything else, things pop up unexpectedly that put us in a bind. There are various ways to handle financial emergencies.
Have a Savings Account
Keep several months' of earnings in an account for emergencies. If you do this, you can quickly and easily access your cash when you need it. You can use it to cover your expenses until you can get back on your feet. It is also wise to keep a small amount of cash in a safe place in your home. Have just enough to use if you were not able to make it to your bank for a few days.
Have a Credit Card
Credit cards should always be used responsibly. They should not be used for frivolous spending. There are some financial pinches where it would make sense to use a credit card to (very) temporarily get out of a tight spot.
Get a 401k Loan
You can borrow against your 401k account. Contact your 401k administrator to find out all the rules. You can usually borrow up to 50% of the value of your account. You will have to pay back the loan in full if you leave the company or are otherwise terminated. Be careful with this type of loan, but it can be a good way to access some cash.
Avoid Payday Loans
Payday loans are never a good idea. You are better off taking a cash advance on a credit card then taking a payday loan. Do not get a payday loan under any circumstance.
Borrow from Friends and Family
If you are in a true financial bind, look to those around you. They can either offer you an opportunity to earn money or they could lend you money. Be sure to set out specific rules before setting up any loan. Put everything in writing to protect both of you. Pay back the loan as quickly as possible.