Today's Wall Street Journal reports (subscription required) on some of the creative lengths people are going to to come up with cash to meet rising expenses in the face of falling home values: life settlement agreements, borrowing against 401(k) assets, maxing out whatever credit cards are left to max out, reverse mortgages, and a strange hybrid of sorts that allows you to receive cash in exchange for a chunk of any future appreciation in your home's value.

Of course, there are situations where all of those solutions may be appropriate but, as I see it, there are two great, obvious and often ignored solutions to a financial shortfall:

  • Work more! Get a second job! Babysit! Mow lawns! As Dave Ramsey says, the best place to go when you need money is work. Before you even contemplate thinking about thinking about borrowing money, ask yourself whether you could find more hours at work or find another source of income.
  • Sell crap that you don't need, including stuff you currently think you need but don't -- Re-examine everything you have. Old video games, books, collectibles, etc. can be sold on eBay. Most families have plenty of non-critical stuff that they could sell to generate cash. And I have a hunch that cash-strapped families are more likely than financially secure ones to have a supply of jewelry and hi-tech stuff that can be sold. They're broke for a reason!

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April 11 2013 at 8:29 AM Report abuse rate up rate down Reply