Tips for tough financial times

Couple signing papers, looking worried

When times are tough, you may be looking for ways to get extra cash. Before you borrow, consider trying a few of these tips.

Eliminate unnecessary expenses

Cutting little expenses during the work week can add up to a lot of savings. Bringing coffee from home, rather than buying a $2.00 cup each day will save you $520 over the course of a year. Cutting out the $1.00 spent in the office vending machine when the afternoon munchies hit will save you $260 a year. And finally, resisting the $10.00 restaurant lunch twice a week and brown bagging instead will save you $1,040 over the course of a year.

Tap into your emergency fund

It’s okay to tap into your emergency fund if it will help you make a mortgage or credit card payment. After all, that’s what it’s there for and you need to stay current on your bills. Just be sure to replenish the fund when your finances improve, and never spend more from this fund than you absolutely must.

Consider your car

Eliminating or reducing a high car payment can make a big change in your budget. You can also save a fair amount of cash by replacing your car with a more fuel-efficient one. Fewer fill-ups means more money in your pocket.

Work for cash

Ask for extra hours at work, or take side jobs. Your skills could be worth cash to others, and everyone can benefit (be sure your primary job allows this).

Unless you’ve exhausted all other resources:

Don’t borrow from your retirement accounts

If you borrow money from your retirement accounts, you may owe taxes on your withdrawal. If you’re under 59 ½, you may also have to pay a 10 percent penalty. Roth IRA rules are less stringent, but keep in mind that everything you spend now means less when you retire.

Stay away from payday loans

High interest rates and fees for these types of loans can really add up. You might even find that the amount you’re paying in fees and interest is greater than the amount of the loan!

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