Things to do when you’re broke before payday or when you need some extra cash. By Karen Fong
Photo: Ashwin Kharidehal Abhirama /123rf.com
1. Carousell non-essential items
Look around your house for non-essentials, which can be anything from clothes to furnishings. Make a list of all these items, take pictures and then put them in Carousell. You can get cash for these items relatively fast. Every dollar counts.
2. Don’t just budget – look for a side income
Once your bank account is totally dry, you are past the point of budgeting. There is nothing else to cut. You will have to focus your efforts on getting some form of side-income. Try to go for simple tasks with an immediate payout. Think dog-sitting or fetching someone’s groceries. Complex tasks like web development or helping someone do their accounts pay more but the money is seldom immediate. These gigs are worth considering in advance if you know you’re going to need the money.
3. Get a low-interest personal loan
If you need a large sum of cash now and then and feel confident about repaying the monthly installments, get a low-interest personal loan. This can help you deal with your most urgent expenses without straining your budget. Personal loan interest rates start as low as 4.5% p.a. and it’s also cheaper than using a credit card cash advance, which has an interest rate of 25% p.a. or higher.
4. Borrow items – not money – from friends and family
People are usually more willing to lend goods than to lend cash. For example, you are likely to get a better response if you ask a friend or relative to spare you a few packets if instant noodles or eggs, than if you ask to borrow money. It’s also better to borrow say, soap powder or the use of a washing machine, than to try to borrow cash to get your laundry done. Borrow the items that you need first. Only attempt to borrow cash as a last resort.
5. Consider pawn shops if you don’t want to get a bank loan
Pawn shops will pay you based on the item you put up. Most will give you up to six months to buy back the item before auctioning it off. The interest on the loan is about one per cent for the first month, rising up to 1.5 per cent on subsequent months. One advantage of using a pawn shop is that your loan cannot spiral out of control once six months are up. The worst thing that can happen is that your item will be sold. Plus there’s the possibility of getting your item back if you can afford to buy it back in the next few months.
A version of this story first appeared in CLEO. Offering an insider perspective on everything a twenty-something woman in Singapore wants or needs to know, CLEO Magazine is now available in both print and digital formats. Visit www.CLEO.com.sg to subscribe.