10 Worst Things to Do When Your Cash Is Tight


When cash is tight, it is easy to become flustered and make poor decisions that plunge you even deeper into financial disaster. Even if you are down to your last dollar, avoid the numerous fiscal mistakes that are almost guaranteed to make your situation worse. Here are ten of the worst things to do when your cash is tight.

1. Gambling

Even though it makes little sense, many people look at gambling as a potential way to recoup their losses and turn their financial situation around quickly. The problem with this logic is that it rarely works. When you are down to your last $10, resist that urge to purchase lottery tickets with it and possibly land a windfall. It is much more likely that you will end up broke.

2. Securing short-term loans

Although short-term cash lenders are on every corner, borrowing from them plays right into their hands. Payday and title loans do nothing more than cause you to rack up additional debt and possibly endanger ownership of your car. Struggle through until your next payday and avoid these lenders like the plague.

3. Dealing with loan sharks

Not only is borrowing from a loan shark illegal, it is also dangerous. No matter what situation you find yourself in, avoid hitting up a loan shark for a loan. Not only do you not want to associate with these kind of people, you certainly do not want your legs broken when you find yourself unable to pay them back.

4. Using your credit cards

Sure credit cards can help you out of a bind when money is tight, but you always pay for it in the end. Unless you know you can pay off the entire balance at the end of the month and avoid accumulating interest charges, leave your credit cards in your wallet and cut your expenses until you get paid.

5. Pawning your valuables

While the flashing neon sign of a pawn shop may seem like the answer to your prayers, it is not. Pawning items always presents a risk that you will lose them if you do not have the money to buy them back and even if you do, you have spent extra bucks for the pleasure of the loan.

6. Borrowing from family and friends

Even if your friends and relatives have money, that does not mean they want to loan it out. Loans between family and friends are famous for leading to hard feelings. If something goes wrong and you are unable to pay it back, you may cause significant feelings of resentment in those closest to you and cause them to feel that they are nothing more than an ATM.

7. Stealing

While most people rise above stealing, when you are desperate enough and come across unattended cash and valuables, it can be tempting to help yourself. Realize that in the long run, you will do more harm than good and you could very likely end up in jail.

8. Breaking the law

When their situation is dire, some people choose to break the law and make cash in illegal ways. Selling drugs, pedaling prescription pills, or dealing in stolen property is illegal. The risk you take is never worth the potential gain. Remember that a short-term solution can cause you long-term problems.

9. Dipping into your retirement fund

Knowing that your retirement money is stashed away when you need cash can be hard to deal with. Still, if you borrow from your retirement fund you will incur taxes and pay significant penalties for accessing the money before retirement age. Forget about your retirement fund and look for other ways to generate cash.

10. Writing bad checks

When you have a bill that must be paid and do not have the money to pay it, you may be tempted to write a bad check. Sure, that check may float out there until your paycheck hits the bank, but if it does not you will incur tons of overdraft fees for each item that clears your account in the meantime and cause yourself more problems than you had to begin with.

While being short of cash is never ideal, it is crucial that you keep a cool head when you find yourself in that situation. Instead of making serious financial mistakes that have long-lasting consequences, tighten your belt and squeak through until more money comes your way.