Master the Art of Saving

Financial emergencies are all too common in the United States. Almost half of Americans couldn’t handle a $400 change to their budget, and many in this situation are working members of the middle class. Whether you’re facing an unexpected medical procedure, need to repair your car as soon as possible or just can’t cover rent this month, you’re not alone in your struggles to pay the bills. You have options for handling these sudden expenses; here are a few ideas for getting money right away.

Sell Some Stuff

It’s not ideal, but you can raise cash quickly by selling off some of your possessions. You won’t get top dollar for your goods, but you can get money in your pocket to take care of your emergency right away. You have multiple options for finding a quick buyer:

• Post an ad on Craigslist for big-ticket items like televisions, appliances and expensive apparel.

• Visit a pawn shop or flea market stall to unload your lower-value items.

• Host a yard sale this weekend. Even better, find a local rummage sale you can join for increased foot traffic and better odds of getting the money you need.

• If you have children’s items like clothing, toys or books, look for a Facebook group for parents in your area. You might be able to sell unused goods in a single lot to a sympathetic family looking to fill up their nursery.

Donate Plasma

Don’t be fooled by the euphemism of “donate” plasma. That language exists to circumvent the federal government’s rules on selling blood and blood components, so you’ll technically be paid for your time, not your plasma. Either way, the end result is cash in your pocket. Plasma centers offer big bonuses to entice first-time donors, so you could score up to $100 with your first two visits. You won’t be alone; many others use plasma to stay afloat financially. Donating usually requires a physical exam to ensure you’re healthy and then 2 to 3 hours of time. You can donate up to twice a week.

Short-term Loans

Despite increasing regulation over the past few years, short-term loan options continue to be available in most states. If you own a car or home or receive a regular paycheck, these high-interest loans can help you deal with your financial emergency if you know how to manage debt wisely. Here are a few different options:

• Title loans. If you own your car, this type of emergency banking will let you use your vehicle as collateral for loans of several thousand dollars. However, if you fail to repay the company, they can charge you large fees or seize your vehicle.

• Borrowing from a friend or family member. Your social network probably won’t charge you interest for an emergency loan, but you might lose some goodwill by putting your friends in the awkward position of having to turn down your request. If you have a good plan for paying back the loan, you can make this method work with few downsides.

• Payday loans. These loans are controversial, with advocates saying they provide access to cash for unbanked consumers and critics claiming they unfairly harm low-income families. If you’re strapped for cash, they can be a convenient option for an emergency loan, but make sure you don’t get trapped in the cycle of borrowing money from them with every paycheck.

Short-term loans from title or payday lenders give you immediate access to the funds you need but charge exorbitant interest rates. Pay them back quickly or you’ll find yourself in an even bigger financial emergency next month.

Use a Credit Card

If you have a credit card available, use it to cover your emergency. Ideally you’d only use your card if you were able to pay off the entire balance with each statement, but financial emergencies are less-than-ideal times. You need to take care of yourself and your family; don’t feel guilty about using the tools you have available.

You’re not alone in your financial struggles, and your situation isn’t hopeless. Use these techniques to raise the money you need right now. Once you’re back on your feet, start thinking about long-term strategies for controlling your finances and building a savings fund so you can be ready for the next financial emergency.

Financial literacy is something we should all have but unfortunately not all of us do. Getting our heads round all the financial terms can often be a headache but it is important that we are all aware of our finances and any problems that should arise.

Debt is one such problem that can spiral out of control if not financially literate. Survey results have shown that plenty of people don’t understand the difference between good and bad debt and sometimes can potentially make the wrong choice. Would you be able to differentiate between good debt and bad debt? In fact, do you have debt and you aren’t sure of which yours is?

A recent survey conducted by Wonga SA found that when over 18,000 of their South Africans were polled, 83.7% of people would take out credit to buy a house and 58.6% would do the same for university education. These are considered good debts as they are for advances in your life – broadening your education or starting a family. However, 5% would borrow for a holiday and 4.5% for things such as gadgets and fashion. These are considered bad debts – these are items or things that people spend money on that aren’t for the long term but for short term pleasure generally.

When it comes to financial literacy, there are three important things to ask yourself before making a purchase:

• What’s it for? Is it for the long term or for short term pleasure?
• Can you afford it? Have you got savings or available cash you can use or will you need to use credit? Can you afford the credit repayments?
• What will it cost you? If using credit, what interest rates are you likely to incur?

Is it for a good debt, something that will benefit you and/or your family and friends in the long term – or is it for something short term, such as a holiday or the latest smartphone until the next new model comes along and you want to have that one instead? If taking out credit, can you afford to repay said credit once you have borrowed it or is this something you would struggle with? Have you considered the overall costs of taking out credit – how much interest are you paying on it, what amount does that mean you need to pay overall? These are all major questions that everyone should ask before making a big purchase and these are important to stop yourself from getting into dire financial situations.

We’ve all heard stories about people finding themselves in massive amounts of debt and not being able to see a way out. By being financially literate, knowing your worth and what you can realistically afford to spend and maybe even taking control of the situation by making major changes to your lifestyle and/or spending habits, you can save yourself from getting into sticky situations that you may find harder to get out of than just days before.