Many of us come across a time where we are so short of cash that we can’t pay for the essentials. It may be because you had unexpected repairs or bills that had to be dealt with, it could be because of a problem with your wages, or it may be that you have overspent without realizing it. Whatever the reason, it is important to find ways of bridging the gap so that you have money with which to purchase essentials.
For businesses, there are various different financial solutions available to deal with cash flow issues. This includes tapping into a working capital fund or opting for a revolving line of credit from a lender. However, what happens if you need a short term solution when it comes to your personal finances? Well, the good news is that there are a few options that you can consider.
Some simple solutions to bridge the financial gap
If you are struggling to make ends meet from time to time, you should consider the options that are available so that you have a financial solution available. Some of the possible solutions you can consider include:
- Get a credit card for emergencies: You can apply for a credit card and then reserve it for use in emergencies. If you use it to make purchases and repay it in full with the interest free period specified, you won’t have to pay any interest. This is potentially an affordable way of accessing funds in an emergency. However, if you do not think you will be able to repay in full within the interest free period, it could become a costly way to bridge the gap because of the high rate of interest charged.
- Payday loans: There is no doubt that payday loans have received very bad press over recent years. This is not surprising, as the rate of interest charged on some of these loans is eye-watering. However, in the event of dire emergencies they can still provide a financial lifeline on a short term basis. One thing you do need to avoid is rolling the loan over from one month to the next — otherwise, you’ll pay a fortune in interest.
- Family loan: Most people are not keen to borrow money from family members or friends, as it can put strain on the relationship. However, if there is no other option then this may be the only solution to enable you to meet your essential costs. If you do borrow from family members, make sure you repay them in full and on time when you have the money. The quicker you pay them the less of a strain it will cause.
For those who have bad credit, the options are more limited, as you may have heard in financial online news reports. However, most payday lenders do not perform credit checks; and in terms of credit cards, there are a number of cards designed for those with damaged credit. Therefore, it’s still possible to get the financial aid you need even if your credit score is not the best.
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My father who came of age in the depression was well aware of the need some family members had in terms of short term financial situations. If he was able, he would loan them money recognizing the relationship challenge you mention. When he was repaid, his standard comment was, “Now we’re back on speaking terms.”
Len Penzo says
Love it, Steve! Thanks for sharing that.
Jorma J Tontti says
I recommend credit card, which gives your bill a one month no-interest payment time. With that it is possible to handle those sudden costs and pay back from the salary. And this loan is free.