With the recession still going strong, our budgets are tighter than ever. More Americans are finding it hard to make ends meet and are stretched thin. So, what should you do if you find yourself in need of money at the end of the month? Where should you turn if you need cash sooner rather than later? Without a doubt, there are a few good places to turn to get a little extra income and there are some horrible places!
The Worst Places To Get Cash
Taking Money Out of Your IRA. If you are under the age of 59 ½ years old, you will pay a ten percent (10%) penalty. If it is a traditional IRA, you will have to pay taxes on the money you take out. So, ultimately, you could lose almost half of your money in taxes and penalties.
Using Credit Card Cash Advances. You will pay anywhere from a two to a five percent fee just for the right to use a cash advance. And, that is on top of the hefty interest rates you will be charged as well. Many credit card companies charge a higher interest rate for cash advances than normal charges for consumer items.
Pay Day Lender. Many of the loans from payday lenders start at a hefty 30% annual rate. Fees can also lead to triple digit costs for a loan that could be as little as a few hundred dollars in principle.
Cashing Out A Roth IRA. Did you know that you can withdraw any amount of principal that you have deposited in a Roth IRA penalty free? You are just not allowed to withdraw interest and capital gains earned without an early withdraw penalty of 10%. Your principal was already taxed before you invested it, and so the withdraw is tax free. By no means am I recommending this method. It is a mistake of course. By withdrawing money from your retirement account, you are foregoing future compounding interest which can cost you hundreds of thousands of dollars.
The Best Places To Get Extra Cash
Sell Some Stuff. Are you having trouble making your car payments? Maybe you need to sell your car then. That is one of the quickest ways to free up a huge chunk of your monthly budget. We all also have some stuff in our attic that we could sell on websites like eBay or Half.com.
Cut Your Budget. If you look at your budget in depth, you may be surprised to find places that you can cut out unnecessary expenses. How much do you spend on cable television every month? Do you have a coffee or eating out habit? Do you realize that if you spend $4 a day on coffee at your local coffee shop, that habit can add up to $20 a week or $1,000 a year? And, that is just assuming that you do not get a bagel or muffin with your coffee
Take A Second Job. When things get tight at home in the budget, you should look at both sides of the accounting equation. There are only so many cuts to your budgets that you can realistically make every month. The only other option in many cases is to increase the income side. There is no shame in taking a second job on a part time basis to supplement your income while times are tough. Delivering pizzas is a far better option to earn extra income than any of the “worst” options listed above.