Where can you tap if you come up short?

1.  Emergency fund

2.  Summer salary savings

3.  Claim DDA reimbursements (generally there’s also travel reimbursements on their way, but these are filed right away and are highly unpredictable, and sometimes the IRS gives us money back when we file, though not always) and for smaller emergencies, credit card rewards.

4.  Taxable stocks

5.  Roth IRA principal (hopefully we wouldn’t have to touch this)

6.  With a penalty:  IRAs, 529, etc.  I can’t see us doing this though.

7.  Sell stuff.  Do freelance writing.  Though these have delays.  Similarly grants can provide summer salary, but that’s going to have major delays.

8.  Banks of mom and dad.  Middle-class privilege!  (I could probably also tap my sister in a true emergency.)

9.  Credit cards… (if it’s really short term, as in, I could pay off before interest accrued, I’d tap these before stocks), Home equity loan, I dunno…

#2 says:

1.  My savings account

2.  My other savings account

3.  My partner

4.  credit cards

5.  some of my richer friends

6.  my dad & former stepmom

7.  my in-laws, uh… then…

8.  wider family, cousins, aunts, uncles

after that I guess I’m SOL!

19 Responses to “Where can you tap if you come up short?”

  1. Chelsea Says:

    A CD with a very poor interest rate. At least that’s what we’ll be doing this summer as we have 1. a move, 2. a salary gap and 3. the likelihood of needing to become a 2-car family.

  2. Linda Says:

    1. Extra from the “vacation fund.” This is the default account in which my paycheck is deposited. From here I transfer out money for monthly bills and to other investments. I sort of budget my vacations this way: depending on how much is in there (plus a bit for slush) I know how much I can spend on a vacation. Some years I can do a big splurge vacation (Scotland! Galapagos Islands!) and other years I just do smaller vacations (Maine! California!)
    2. Emergency fund
    3. Submit FSA reimbursements (I’m always behind on this) and use credit card cash awards
    4. Sell stuff
    5. Vanguard annuity principal
    6. HELOC? I’m not sure if this is an option since I don’t already have one in place and I understand it’s hard to set one up if you’re in distress (job loss, etc.).
    7. Credit cards
    8. Sister
    9. Father

    Family is at the bottom of the list because…it’s complicated. I’d have to be pretty destitute to go to my father who has denied me monetary help in the past. Mom has no money, so it’s not worth asking. Sister is more likely to help, but I’m not 100% sure.

  3. Rented life Says:

    1. Savings
    2. Credit card (though this is my least desirable option. Credit cards stress me out.)
    3. Brother, though he just changed employers so I don’t know if he client base is stable again. That said he was free to change jobs because he listen to his smart sister and has a nice emergency find to cover himself.
    4. My parents.
    5. I think if I really needed it and nothing else was an option I could ask my one friend. But I’d rather not.

    Right now I’m doing the other thing when funds are tight: making more money. I’ve increased my hours a little at work and I’ll teach a class in the fall (I can now afford to only teach things I like!)

  4. Leigh Says:

    I always start with extra cash flow first, which is about $2,000 most months and higher near the end of the year due to no social security tax and 401(k) usually filling up in November. (That’s how I paid for my closet organizers, oops.)

    1) Emergency fund (~6 months’ expenses)
    2) Series I Saving Bonds (~3 months’ expenses)
    3) Figure out a home equity loan? Looks like I could get one from my credit union for 3.75%
    4) Taxable index funds (~5 months’ expenses)
    5) Roth IRA principal (~7 months’ expenses)
    6) Another retirement account (~2 months’ expenses)
    7) Sell my car and use car sharing services (~3 months’ expenses)
    7) Sell my condo and rent (~6 years’ expenses)
    8) My parents

    So looks like I could live for just over 2 years without needing to sell my condo and over 8 years before I tried to get money from my parents. That’s not bad.

  5. plantingourpennies Says:

    1. cash on hand
    2. HELOC on duplex

    Beyond this the order starts to depend on the situation/timeline

    For an investment opportunity — Bank of Mama & Papa PoP or seller financing for whatever we are purchasing, possibly liquidate some taxable brokerage depending on projected returns…
    For a short term cash flow needs (say tragic hurricane repairs on multiple properties – estimated repayment time < 6mos) while we still have our jobs – personal loan from bank or credit cards
    For long term structural changes to our finances where cash now is more important than cash later – start off loading taxable investments as needed – sell investment land, sell taxable brokerage holdings, sell rental property

    For an expected zombie apocalypse?? I don't know… sell our own house and start renting/preparing to live in RV, liquidate retirement accounts as needed (start with penalty free portions and move on from there). Convert all funds/assets into tradable and easily transportable goods… =)

  6. delagar Says:

    1. Credit cards, but they’re nearly tapped out
    2. Five coffee cans filled with spare change which (so far) I haven’t had to turn into grocery money
    3. Bank of Mom & Dad (only had to turn to once so far)

    We’ve really used up all our sources of desperate income, sadly. That is, Dr. Skull had some trust fund money. That’s gone. I had some savings. That’s gone. Now we’re just barely hanging onto being middle class, hoping for things to get better.

  7. hypatia cade Says:

    I read this a few years ago – It really made me stop and think. And it made me realize that I probably know, am friends with, and work with these folks. I also look at life events happening around me and can see how easy it would be to become one of these people (death, job loss, significant health problem, significant weather event, etc.):

    • nicoleandmaggie Says:

      I saw that NBER study they mention presented at ASSA when it came out. (Though it’s not really an NBER study… NBER just allows members to put things out as working papers. It’s an NBER paper, but not an NBER study. Really they should list the main author.)

  8. moom Says:

    If we need more money than is in our checking out our next source depends on how fast we need the money. Instantly, then use credit cards. If there is a big fee for the credit card use and the seller is willing to wait for the transfer to go through we transfer money from our savings account (supposedly also our house-buying fund) using the system called BPay here in Australia. Somewhat similar to ACH in the US. We have $150k in there. If we need more money in our checking account fast then it is quicker to use a margin loan against my stocks…. Next would be selling stocks redeeming mutual funds… and we have hundreds of thousands of dollars of that…

  9. Sandyl FirstgenAmerican Says:

    I guess once I ran out of normal cash I’d start reducing variable expenses like cable etc… When we were in our smaller done over house I could live on next to nothing (easily on a minimum wage job), but at this point in time it would be tough as there are still many repairs to be made on our house as its currently still a fortune to heat in the winter. I suppose my plan would be to move out of my house in the summer to a cheaper place and rent it for big bucks. During the 3 months of summer when NYC people move here in droves, I could get $10-$15k/month for it (more once it is nicer). That was our emergency plan if poop hit the fan…but what if its not close to summer? I’d fix the fireplace and get a wood stove and heat with the wood in our yard. I guess I would take on roommates again to split up the expenses. I’ve got a couple of friends that are looking. I can also rent my Mom’s house instead of selling and getting her in with us is still the short term plan…or move her into our main house and rent the back apartment. I guess I do have options even with a big house. It’s an interesting challenge to think through.

  10. Joshua L Rodriguez Says:

    1. cash savings…$300 just for the oh craps
    2. General savings…yup, I’ve got that too.
    3. vacation savings
    4. emergency fund
    5. Investments – I hope I never have to dip in here!

  11. J Liedl Says:

    1. Savings and more savings (although I’ve worked hard over the past five years to build these up, sniff!)
    2. Line of credit (although I’ve worked equally hard not to need to use this)
    3 Credit card
    4. Family (my father and his parents)
    5. Investments (since these are long-term investments, I’d tap those absolutely last)

  12. Revanche Says:

    Credit cards first assuming it’s under 50K and not a long term recurring expense. Pay it off with….
    1. Expenses checking account.
    2. Savings specifically holding money for the expenses account.
    3. Emergency cash fund.
    4. Several CDs.
    5. Sell off stock portfolio.
    6. Retirement savings.
    (How short is short??)
    7. Sell the property if it’s that bad.

  13. In case of (money) emergency, break glass | A Gai Shan Life Says:

    […] and Maggie’s “where can you tap if you came up short” post was good […]

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