Emergency Moves to Make If You’re Broke Before the Next Payday

Sometimes, things don't go as planned and you run out of cash before the next payday. Here are emergency measures you can take to survive until then.

If you have an emergency fund and invest with discipline, you should never find yourself short on cash before the next pay cheque.

But here at SingSaver.com.sg, we’re realists. We understand that things don’t always go according to plan, and sometimes you run out of cash before your next pay cheque arrives. So if you can relate to this scenario, don’t panic. Here’s what Singaporeans can do when your bank account is completely dry.

Try to Carousell Non-Essential Items

Look around your house for non-essentials, which can be anything from clothes to furnishings. Make a list of all these items, take pictures of them, and then put them on Carousell. You can get cash for these items relatively fast. While you won’t be flush with cash, a few hundred dollars can ensure you don’t starve till the next pay cheque.

One good item to resell, if you’re absolutely desperate, is your phone. Consider downgrading to an older model, or buying a “dumbphone”, a phone that is strictly for making calls and nothing else (no applications).

This can provide a good amount of survival money until you can afford something better.

Don’t Just Budget - Look for Side Income

Once your bank account is totally dry, you are past the point of budgeting. There is nothing else to cut. You will have to focus your efforts on getting some form of side-income.

Try to go for simple tasks with an immediate payout. Think dog-sitting or fetching someone’s groceries. Complex tasks like web development, or helping someone to do their accounts, may pay more; but the money is seldom immediate.

Remember to include the cost of transport when you take a job from others.

If You Need a Bank Loan, Get a Low-Interest Personal Loan

We really encourage you to save properly so that you are not reliant on credit. Do not end up in a cycle where you constantly have to borrow to last into the next month.

That said, if you need a large sum of cash now and feel confident about repaying the monthly instalments, get a low-interest personal loan. This can help you deal with your most urgent expenses without straining your budget. As personal loan interest rates start as low as 4.5% p.a., it’s also cheaper than using a credit card cash advance, which has an interest rate of 25% p.a. or higher.

You can also use our comparison tools to find the cheapest personal loans. Currently, HSBC Personal Loan has the friendliest interest rates at 4.5% p.a. (EIR 8.5% p.a.). We also have an exclusive promotion where you get S$100 IKEA vouchers if you apply for the HSBC loan at SingSaver.com.sg.

Consider Pawn Shops If You’d Rather Not Get a Bank Loan

Pawn shops will pay you based on the valuation of your pledge (the item you put up to get a loan). Most pawn shops will give you up to six months to repay the loan, before auctioning the item. The interest on the loan is about one per cent for the first month, rising to 1.5 per cent on subsequent months.

One advantage of using a pawn shop is that your loan cannot spiral out of control; once the six months are up, the worst that can happen is that your pledge is auctioned off (and if someone buys it for more money than the pawn shop loaned you, you will be able to keep the excess).

When you are in desperate straits, pawn shops are a better alternative to selling your watch or jewellery, for two reasons: first, you receive money on the spot. Most shops will insist on a consignment approach, where you receive money only after they sell your item.

Second, pawn shops allow the possibility of getting your pledge back, if you recover financially over the next few months.

Borrow Items, Not Money, From Friends or Relatives

People are usually more willing to lend goods than to lend cash. For example, you are likely to get a better response if you ask a friend or relative to spot you a few packets of instant noodles or eggs, than if you ask to borrow money from them. It’s also better to borrow, say, soap powder or the use of a washing machine, than to try and borrow cash to get your laundry done.

Borrow the items that you need first; only attempt to borrow cash as a last resort.

Call the Bank and Ask for Leniency

If you are not able to make even minimum repayments, please contact credit counselling services immediately - do not wait for your debt to get worse.

That said, if you are about to miss loan repayments, call the bank and inform them. They will sometimes grant you a bit of leniency, or will work out an alternative repayment plan - do not keep quiet and pretend nothing’s wrong. Once the first warning letter arrives, your credit score will suffer a big hit. Furthermore, the bank will impose late fees.

As much as it may pain you to do so, call the bank and inform them immediately.

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