Last Resort Finance Options - Money Soldiers
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Last Resort Finance Options

When you are truly struggling with your finances, you might want to look into last resort finance options.  A last resort financial option would be something that you consider only when you have tried everything else.  If you feel like you are on your whit’s end and nothing else is working out for you, a last resort financial option can provide you with immediate cash so that you can get back on your feet.  Keep in mind that these are financial options you should only consider if you have no other solution available.

Payday Loans

A short-term loan, also called a payday loan should be a last resort option when you need financial assistance.  Payday loans have devastatingly high interest rates.  In fact, some of the lowest reported interest rates among payday loan companies were still an astonishingly high number, close to a 150% APR.  This can really take a toll on your budget, and that’s why payday loans should only be used if you have tried to get financial assistance elsewhere but did not succeed.

Last Resort The Government 401K Payday Cash Card Last Resort Finance Options

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The Last Resort – cross fingers, close eyes by tommy the pariah[away], on Flickr.  This work is licensed under a Creative Commons Attribution 3.0 Unported License.

Government Funding

We all pay taxes and that is how we contribute to the welfare of the country.  However, the more people on government funding, the more expensive taxes are going to be.  Government funding should be looked at as a last resort.  Whether you are seeking disability, unemployment, food stamps, or any other type of government assistance, it should always be a last resort.  If you are capable of working and earning your income, then that should be what you try first.

Credit Card Cash Withdrawals

Credit cards can be used to purchase things directly and whatever you are buying can be charged to the card.  You can then make monthly payments in order to get the debt paid off.  Credit cards also have something called a cash withdrawal, which is where you use them at an ATM to take out cash on the card.  It’s a last resort move because the interest rate increases substantially when you do this.  Cash withdrawals can also reflect negatively on your credit score, impairing your ability to get financing in the future.  When your credit card cash withdrawals debt becomes unmanageable, sometimes it is best to file for bankruptcy to help stop further damage to your credit score.  You may want to check out LegalZoom reviews to learn more about how to make filing for bankruptcy easy and inexpensive.

Tapping Into Your 401k

If you ask a financial expert, they will tell you that you should never touch the money in your 401k until you retire.  However, if you need money right away, it is a possibility.  Your 401k is likely to contain thousands of dollars and you earn interest off of the money that you have in there.  Taking money out means you will no longer earn interest on that money, you will have to pay income tax on the money that you remove, and you will have to pay a 10% penalty charge if you are under the age of 59.

Borrowing from Family

Family members are likely to be the most generous when it comes to helping out in times of an economic crises.  However, it’s probably something you will want to avoid because of the hardship that can be associated with it.  Borrowing from your family should be considered a last resort, but if you need money, it is something that you should consider.

Jesse Fin
 

Jesse worked as a journalist for a large tv station in Korea in her past life. She now works full time at home as a blogger and loves to help her friends manage their personal budgets.

Click Here to Leave a Comment Below 5 comments
Aspiring Blogger - February 18, 2013

Hopefully I will never find myself in this situation – the best defense is a strong offense I think is the saying! That’s why I have a big emergency fund, but if you’re unable to do that or a huge emergency hits you then sometimes you’re at the mercy of what you can get. I don’t know which option I would pick – as none of them look good – so hopefully this encourages your readers to keep saving!!! Great post!
AB

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    Arnel Ariate - February 18, 2013

    Hi, AB. Great comment, as always. Good for you for having a big emergency fund. I wish I can emulate that, I’m working on it. Having an emergency fund feels so good, it is transformative. Emergency funds have the power to transform your personality from a worried, enslaved-to-office-day-job-that-sucks persona into a free, light and airy persona.

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      Aspiring Blogger - February 18, 2013

      That’s a good point – while I still get frustrated at work and some of the people bother me, I often think to myself that if I really get sick of it I can tell these people to go jump in a lake and there’s nothing they can do about it! It is definitely a freeing feeling! You’ll get there – you’re definitely on your way!
      AB

      Reply
        Arnel Ariate - February 18, 2013

        Thank you, AB. A freeing feeling, indeed. Emergency funds are liberating that is why when I put money aside as savings, I think of it as me buying my freedom. Thinking about savings like that helps keep me motivated.

        Reply
Simon @ Modest Money - December 30, 2013

Hopefully one never has to get to last resorts. As already noted, its best to be prepared in advance for any eventuality. That said, I think over the last couple of years another option has come to fore, peer-to-peer lending and borrowing. Am sure one can acquire the necessary funds to tide them over on platforms such as Prosper, Lending Club etc and at very reasonable rates.

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