First Person: How We Raise Emergency Cash

When life throws you a serious curve, a small emergency fund with $500 in it just won't save you. For our family these financial shocks came in various ways. Some jeopardized our income, but others were more in the nature of opportunities we couldn't afford to miss. Here are the different ways we've raise emergency cash to cope with the financial challenges in our lives.

Job Relocation

Some people lose their job and have to relocate to a different state where greater job opportunities exist. We were luckier. A lucrative job offer required us to relocate from Florida to North Carolina. Our relocation costs were covered by the hiring company, but after the sale of our $70,000 villa in Florida, we were left with only $7,000 in cash to buy a new home in a much more expensive real estate market. To raise $40,000 in emergency cash, we borrowed the money from our 401K retirement plan. The interest was relatively high, but we were paying the interest to ourselves when we made payments back into the 401K plan.

Short Term Disability

A family illness suddenly rocked our finances last year. When my husband became too ill to work, he took a leave of absence without pay. The short term disability insurance offered by his employer as part of the employee benefit's package came to our aide. We were able to raise the emergency cash we needed to keep paying our bills by filling a claim that was substantiated by the treating doctor. As a result we received 60% of the salary we were accustomed to.

Asset Liquidation

Even at 60% income, we had to quickly make up the difference by raising additional emergency cash. We had the choice of selling stock, which was performing well, or liquidating valuable physical assets. We decided to sell an expensive necklace that my husband bought me for my 35th birthday. It was a purchase that we had made for a special occasion, but I had never had occasion to wear so elegant a necklace again. Because of a rise in the price of metals, we did not lose any money on the sale, which helped tide us over until my husband regained his health and returned to working full-time.

Short Term Loans

When we were strapped for cash after our relocation to North Carolina, we took a credit card cash advance. But the fee and interest proved to be unreasonably high, and soon after we transferred the balance to another card. Today, you can find better loans at peer-to-peer lending sites, where individuals instead of banks lend out their money at reasonable interest. But at any time when we need to raise emergency cash for an outstanding bill, like our recent vet bills that came to over $4,000, we prefer to use a credit card with relatively low interest rate and a good rewards program. Then we pay back the loan over time by cutting back on our monthly household budget.

Earn More, Spend Less

A second job offers an easy way to raise emergency cash on a temporary basis. When my co-worker's husband had a stroke and became bedridden, she began working a second job as an evening waitress in a neighborhood Italian bistro. She earned minimum wage, but her tips were great, bringing each shift's earnings to around $100. At the same time she sold their second car to eliminate the $400 car payment. This bolstered the family income even more because she didn't have to pay income tax out of the $400 savings, though she certainly did out of her salary, which diminished its actual worth.

Weekend Jobs

When a toothache led to a root-canal and crown, totaling $2,500, I was grateful for my health insurance benefits that offered partial dental reimbursement of 50%. To raise the remaining sum I became a professional garage seller for a while. Starting by selling my unwanted things, I soon began to buy items at other people's garage sales and sell them for a narrow profit at my weekend sales. With an average profit of $250 per weekend I was able to pay off my temporary credit card debt in 10 weeks.

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