Financial emergencies come uninvited at any moment of life in the form of medical bills, job loss, sudden home repairs, etc. Such emergencies always put a significant burden on your finances. Therefore, having immediate access to cash is crucial during such tiring times to stay afloat and avoid making bad financial decisions. Most of the time, a rainy day fund can save your head, but not everyone has enough savings to cover such dire times.
However, you can secure cash through multiple ways. From traditional loans and Lines of credit to other alternative options, the secret is to select the option that not only fulfills your needs but also reduces long-term financial burden. In this guide, we have mentioned the best options to get your hands on cash to meet your emergency needs without damaging your financial health.
Tapping Into Your Emergency Savings
One of the optimal financial safety nets is emergency savings, as they allow you to meet your unexpected expenses without needing any debt. According to economic experts, it is advised to have savings equal to 1-3 months’ worth of living expenses.
In case you encounter any unfortunate situation, this emergency fund must be your go-to option before seeking any other alternative. Moreover, if your savings are not enough to fulfill your needs, you must use them before you get into debt. You can supplement your savings with other alternative options. This way, you can minimize interest and financial pressure.
Using Credit Cards Wisely
Credit cards are another way to handle emergency expenses as they are the quickest way to get your hands on cash. The card can provide you with temporary and immediate relief when your card comes with a lower interest rate and higher amount limit.
A few credit cards also extend cash advances that usually come with high interest rates and fees, which makes them an unaffordable option. However, credit cards are the best remedy to avoid long-term financial burdens, primarily when you can repay them instantly.
Utilizing a Home Equity Line of Credit (HELOC)
HELOC (home equity line of credit) or home equity loan by Amerisave is one of the flexible ways to get access to emergency funds. It allows homeowners to borrow money against their share of equity in the home, thus presenting a loan with a lower interest rate as compared to other alternatives like credit cards or personal loans.
HELOC serves as a financial cushion during unfortunate and unexpected emergencies by providing the needed funds. However, to use a HELOC effectively, you need to plan carefully. In this financing mode, your home acts as collateral. Therefore, you should only borrow when you can pay back.
Selling Assets or Seeking Assistance
In some instances, you can cope with the emergency by selling non-essential assets, which will provide you with much-needed cash. You can liquidate items such as electronics, automobiles, jewelry, or collectibles through online marketplaces. However, if you feel like the emergency is temporary, you can also seek assistance from your family or friends. However, to avoid straining your finances and relationships, it is necessary to build a clear repayment plan.
