Emergency fund: what to do if you do not have one, but need cash fast

By Stew

Times are tight for many people these days. Many Americans have had to use and even exhaust their emergency funds without warning. There is a whole other group of people who never had an emergency fund in the first place. However you get there, being in a cash crunch without an emergency fund is a tough place to be.

Here are some options for dealing with a dire family cash flow problem:

Borrow from relatives

Money can be a sticky topic in family relationships. Something like this might take a whole lot of humility, furthermore there can be long-term consequences from family financial arrangements. However, if your need is genuine, you might have family who can help.

Put off expenses

Look through your budget for upcoming expenses that you might be able to procrastinate. Maybe you can get a few more months out of your eye wear or maybe you can put off getting dental work done. That new roof? Next year. College? New refrigerator? Again, there might be consequences for a person who delays dental work, you have a brain, weigh the pros and cons and make the best decision that you can.

Tell it to the church

If your church is a glorified social club, this is not going to work, but if you are a faithful member of a body of believers that is seeking truth and is truly a family, then a dire financial need should be mentioned to your brothers and sisters in Christ. It might not be wise to make it a public issue, but the ability to share a need with close friends and your elders is one of the purposes of the local church.

Rethink debt payments

If you are under extreme financial pressure, chances are good that debt is a major factor. Like Dave Ramsey sometimes says, you might have to just forget about your credit score and take care of the necessities of life. Do not quit paying the electric bill or the water bill – you might want to keep your mortgage current, but how about those student loans? or the payment on your second vehicle? If  you have to choose between food and a credit card payment, you only have one choice.

Take cash out of retirement savings

I had to cash out all of our retirement savings last year – not that I had much in the first place, but I believed that the situation called for that kind of action. I do not recommend this as a first or second resort, but it is one option available to a person who needs money right now. Talk to a tax adviser, there might be a way for you take money out of an IRA without incurring a penalty, and you also might be better off accessing a low interest loan from your retirement savings.

0% APR balance transfers

Again, this is an option for an emergency, but if you have good credit, you might be able to access a very low interest balance transfer from one of your existing credit cards or even apply for a new card with a good introductory rate. If you are careful and think things through, this can be a good short-term solution to a cash flow problem.


This should be an ongoing, first option for the believer, but how many of us truly spend time in prayer for financial needs? I know that prayer needs to occupy a higher priority on my list of solutions. Maybe if you are uncomfortable asking relatives for money, you might be more interested in asking them to pray. God has asked us to “cast all” of our cares on Him and he will meet our needs.

The strategies outlined here (with the exception of prayer) are for people in serious financial trouble. If you are still paying the cable bill, do not ask your church for help getting groceries. There are also a couple of things that will make your situation worse. The first one is taking a payday loan. A payday loan or paycheck cash advance is a huge mistake. I have a hard time envisioning any bad financial scenario that is improved with a payday loan. The other strategy that you must avoid is more spending. As my college roomie used to say, “for mercy’s sake, STOP!”. Do not pay someone to consolidate your loans, do not buy equipment to start a home business and do not write a check to be a part of a “guaranteed, groundbreaking investment opportunity!”

Hope you never have to deal with an emergency without an emergency fund!

Article by Stew

Photo by hellowstanley

3 Responses (including trackbacks) to “Emergency fund: what to do if you do not have one, but need cash fast”

  1. Padraig Says:

    Another bit of good adice is to look very closely at utility bills. Tere are generally savings to be made on things such as phones, electric, gas, broadband etc.

  2. dramon Says:

    Good suggestion on utilities,Also, check any insurance you have. Also, If you are a home owner and have equity, a home equity line of credit can be effective. It can also just add more debt if not used effectively. I know my parents use it very well ( for a large car repair bill) as a low interest loan and pay it back within a year.

  3. Kate Says:

    With regard to rethinking debt payments, many creditors are willing to work with you to make payments more affordable, if you face them directly and explain the situation. (In my own personal experience, avoidance only makes it sooo much worse) Of course, through extended payment plans and whatnot, you’ll most likely end up paying a boatload more in interest, but that’s better than destroying your credit over a delinquent payment.
    Also, taking cash out of your retirement savings should been seen as a last resort. A loophole, however, is that many 401(k) Plans have a loan feature, allowing you to effectively borrow money from yourself, therefore avoiding any early withdrawal penalties or future tax consequences.