Non Loan Options
Staying on top of your finances can be difficult with the ongoing increases to everyday living costs. Understanding how to efficiently manage your finances is easier than you think and the first step is through budgeting and controlling what is in your power.
Borrowing is rarely the correct answer to financial issues. In case you need some access to quick emergency funds, it is better to try it get it from other sources than opting for a short term loan or pay day loan and incurring interest. Below are some practical tips on how to obtain money without a loan.
Reduce Your Costs – Budgeting
One quick and easy way to improve your cash flow on an ongoing basis is to cut costs. Look at reducing different service plans if you can, items such as memberships, mobile, paid tv, electricity, etc… If you can its even better to go a step further and cancel any services or memberships that you can live without that may affect your lifestyle. An example is paid tv, free-to-air offers multiple channels to provide the family entertainment. There are cartoons, entertainment, news and sports – why waste money on paid TV when you can get it for free?
The cost of utilities is another area that can be reviewed, the competition in providers in this space has increased which means more providers fighting to gain your business. Call around and see if you can get on a better deal or visit a comparison site and see what savings are available to you in your area.
Here are a few great options that you can implement on your own, they are also in order of which you has the most potential for the highest return. They all take a little bit of your time and some are quicker than the others.
– Garage Sale: This option does take some time and does have a few caveats to it; weather, location, advertising, time. If you are a very hands on person this is a great option as you can do the negotiating to get the best return on your items.
– Sell Items Online: Some may consider this to be a little bit easier than a garage sale but it has its pros and cons as well. Some advantages are that you have a bigger audience and your items an be show cased 24/7. Drawbacks can include the time to set up ads; taking pictures, writing up descriptions, answering questions, shipping, returns.
– Pawn Shop: One of the easiest forms of getting cash for goods is to either pawn or sell the items to a pawn shop. The draw backs would include receiving a lesser amount for the goods and not knowing if they will even purchase the goods. You can call ahead of time to see if they would be interested though.
Get a Part-time Job or Consult
Depending on how urgent the funds are needed, taking on extra work is a great way to obtain cash. In some cases they may even lead to another career choice. If you are savvy with a computer, there are heaps of online businesses that allow you to bid on jobs online. Elance is one of the better ones and it provides a large range of job types including: accounting, web design/development, marketing, data entry, finance, etc.
Request a Raise
Sometimes it can be as easy as asking for extra hours or a raise at work. This doesn’t have to be a difficult or uncomfortable situation. Employers are generally happy to see employees take initiative and ask to do additional tasks. they are also happy to reward those who do.
Redraw (for home owners)
Suppose you have an existing home loan and you have been repaying more than the stipulated amount, then you can borrow that money again if you are in financial turmoil. This is called Redraw, as opposed to a withdraw, and can be borrowed from a minimum of $500 – $1000. Another option is to stop the repayments for a short period, after informing your bank. This along with accessing Super should be last resort options as they can impact your future.
If you are in urgent need of some money, and have some extenuating circumstances like loss of job or illness, etc. you can access your superannuation funds. You cannot normally gain access to your superannuation funds until your ‘preservation’ age, which is 55 years for those born before 1st July, 1960. The ‘preservation age’ keeps increasing until it reaches 60 years, for those born after 1st July, 1964. However, in case of severe financial hardship, you can approach the Superannuation Fund and ask for an early release of funds. Depending on the reason you are planning to cite in your application, you have to apply to either the DHS or to the fund directly.
Financial Hardship-In case you are citing financial hardship as a reason; you must to provide proof of Centrelink or Newstart allowances or Disability Funds, along with a letter requested and obtained in the preceding 3 week period before the date of the application for early release. Ensure you consult a financial adviser before you take this extreme step.
Compassionate Grounds-When you are applying on the basis of compassionate grounds, you have to apply to the Department of Human Sciences; they will review your application and give a recommendation within 10 days. Please remember that even after the DHS recommends, you superannuation fund might refuse you.
Other reasons-There can be other specified reasons for early release of your superannuation funds; this could include imminent loss of your primary place of residence, or in other words, if you are literally in danger of losing the roof over your head or in case of any unexpected illness or death of a loved one and funeral expenses. Before you decide to go for this option, please consider that you are dipping into your post-retirement funds and your sunset years might become harder than you had planned.
Another thing you have to note is that even though early access might temporarily ease your financial worries, in the long run, if you don’t pay off all your debts, you may still end up with an ongoing financial crisis. When you dip into superannuation funds, the released funds become vulnerable to creditors, which were previously protected.
Other options to consider prior to redrawing on your mortgage or accessing super can include a range of benefits and low interest loans from non-profits and government initiatives.