I Will Teach You To Be Rich: No guilt, no excuses - just a 6-week programme that works

by Ramit Sethi

You Need the Money for an Emergency If you suddenly need money for an emergency, here’s your hierarchy of where to get it. 1. Use your savings account, which you established in Chapter 2. 2. Earn additional money. Drive for Uber, sell old clothes, pick up tutoring. You might not be able to earn a huge amount in a short time, but selling some of your own goods is an important psychological step – it will let you prove how serious you are both to yourself and to your family (which will be useful if you’re asking them for help). 3. Ask your family if you can borrow the money from them. Note: This doesn’t work if your family is crazy. 4. Use the money in your retirement accounts. You can always withdraw money you contributed to your ISA penalty-free, although you’ll be severely retarding your money’s ability to compound over time. With a pension, you can take money out for “hardship withdrawals” (mainly if you are terminally ill), but you will be hit with a punishing 55% tax otherwise – possibly more. If it comes to this, consult your HR representative. But I urge you to avoid cashing out your retirement accounts because of the penalties and taxes involved. 5. Use your credit card only as a last resort. I can’t emphasise this enough: The chances are very good that your credit card will gouge you as you’re repaying it, so don’t do this unless you’re truly desperate.