ducking phone calls or letting payments lapse without explanation.
5. Avoid Hard Money Loans
In times of financial distress, it’s common for people to turn to “fast” money when they need cash quickly. But think twice before seeking “help” from hard-money lenders or getting yourself into a jam with a payday loan or a vehicle title loan.
I know you may desperately need to pay the light bill or buy food, but explore other options first. Can you borrow money from a relative or friend (and of course pay them back)? Is there something you can sell to raise cash? Or do you even have a credit card you can use?
Tapping a line of credit or even taking a cash advance from a credit card is far more preferable than taking out payday loans, many of which have annual interest rates of 400% or so. Not to mention that people who take out payday loans tend to get locked into a vicious cycle of repeated borrowing with these high-interest rate products.
These five steps won’t solve all your money problems when you’ve been furloughed or hit with a pay cut. But they should help you survive this financial shock and come through the event stronger financially in the long run.