Whether you need to cover an emergency expense or pay an unexpected bill, occasionally you may find yourself in a position where you need to raise cash fast. There’s nothing to be ashamed of here; as we’ll see, there are some financial habits and strategies you can put in place to ensure you don’t find yourself in this situation again in the future.
However, if you’re interested in resolving this current problem, you’ll need to find a way to raise cash now.
Strategies for Raising Cash
There are many questionable strategies you can use to raise cash, but many of them would put you in a compromising position. Instead, try one of these viable strategies for raising cash:
- Sell a car. If you drive a personal vehicle, consider selling it outright. As long as it’s in somewhat decent condition, you should be able to get somewhere between several hundred and a few thousand dollars for it. For a luxury car or something more advanced, you may reach into the tens of thousands. In the meantime, you can ride the bus, ride your bike, or hitch a ride with a partner or coworker to get where you need to go. You may ultimately find you like these alternative travel methods better than driving a car in the first place.
- Sell your home. If you’re in need of more cash, you could consider selling your home to a cash buyer. In this approach, you’ll typically sell your home as is—which means you won’t have to worry about making repairs, improving the curb appeal, or going through the other steps typically necessary to close a transaction. Once you pay off your existing mortgage (if you have one), you can pocket the remainder of the funds—and hopefully take care of your emergency expense right away.
- Liquidate other assets. You may be able to liquidate some of your other assets. If you own stocks or bonds, you may be able to sell them and raise funds that way. If you have a collection, old clothes, devices you no longer use, or other valuable personal possessions, you may be able to sell these items as well. Consider holding a garage sale, or listing these items on an online auction to raise money quickly.
- Tap into a retirement account. Another option is to tap into an existing retirement account, like a 401(k) or an IRA. This should be a method of last resort, however; retirement accounts are designed to help you save for your future. They come with impressive tax advantages, but you’ll face a penalty if you withdraw before reaching a certain age. Think of it as stealing from your future self, and only use this strategy if you must.
- Ask friends or family members. More reliably, you may ask friends or family members if you can borrow money. Depending on your relationship with them, they may be willing to work out a deal with you. Chances are, they’ll be more willing to grant you a loan than a major lending institution, and they’ll be able to offer you more favorable terms and interest rates. However, it can be embarrassing to reach out to loved ones for money, and if you’re not able to pay them back in the way you agreed, it could damage the relationship. Tread carefully here.
- Take out a loan. If you’d rather not hit up your friends and family members, you could turn to another lending institution. If you have a decent credit score or something you can use as collateral, you may be able to secure a decent interest rate. Just be sure you have a plan to pay this money back, or even a relatively small interest rate can cost you dearly in the long run.
- Pick up a side gig. You can also raise cash by completing odd jobs or picking up a side gig, though you may not have time to create a fully fleshed-out independent business. For example, you could offer to babysit or pet sit for others in your neighborhood, or offer handyman services to homeowners in need. These gigs may seem small, but they can help you make a few hundred dollars quickly.
Establishing an Emergency Fund
If you want to avoid this situation in the future, the best thing you can do is set up an emergency fund, which you can tap into whenever you need the extra cash. For most people, this should amount to a few months’ worth of expenses, or at least a few thousand dollars. Start by optimizing your budget by cutting your monthly expenses, then pocket the difference in your emergency fund month after month; eventually, you’ll accumulate the funds you need to protect you from such events in the future.