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.
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.
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.