How can you manage unexpected expenses without getting trapped in a debt cycle?

Ralph Estep Jr.:
00:00

Welcome back to the Ask Ralph Podcast where we tackle your financial questions with faith as our guide. I'm your host, Ralph, and let me tell you, today's topic is close to my heart. We're diving deep into a question I get asked all the time: "Ralph, I need some extra cash, but I don't want to get stuck in a cycle of debt with a personal loan. What are my options?" Trust me, I get it.

Ralph Estep Jr.:
00:24

Life throws all of us curveballs: unexpected car repairs, medical bills that seem to appear out of thin air, or maybe you just need a little breathing room to pursue that dream you've been holding on to. But here's the thing: you don't have to fall into the personal loan trap. There are better ways, my friends, and we're going to explore them right here, right now. So grab your coffee, settle in, and get ready to take control of your finances God's way.

Ralph Estep Jr.:
00:55

I'm so glad you're joining me today. Before we jump into today's crucial conversation, let's take a quick look back at yesterday's episode where we demystified the world of ETF funds. Remember, those are like diversified baskets of stocks that can help you build wealth over time. If you missed it, don't worry. Head over to askralphpodcast.com and catch up.

Ralph Estep Jr.:
01:16

And tomorrow, we're tackling a question that often keeps people up at night, and that's this question: "Ralph, how far back can the IRS audit me?" Well, tomorrow I'm going to break it down. I'm going to ease your mind and empower you with the knowledge you need to face tax season and this big question with confidence.

Ralph Estep Jr.:
01:35

Well, now let's turn to the good book for some guidance. "Keep your lives free from the love of money and be content with what you have because God has said 'Never will I leave you; never will I forsake you.'" That's from the book of Hebrews 13:5. This verse emphasizes the importance of finding contentment and avoiding the pitfalls of greed or an unhealthy fixation on money.

Ralph Estep Jr.:
02:01

And it's easy to get to that. It provides us reassurance that God will always be present to provide for our needs. So today, we're going to explore some fantastic alternatives to personal loans. These options can help you access funds without falling into a debt spiral. Remember, every situation is unique. So it's essential to pray for guidance and seek wise counsel before making any financial decisions.

Ralph Estep Jr.:
02:29

Alright, so let's dive right in. First up, we have the "Emergency Fund Savior." I know what you're thinking: "Ralph, you're always talking about these emergency funds!" And you're right, I am always talking about them because, my friends, having three to six months' worth of living expenses saved up can be a lifesaver when unexpected expenses pop up. It's like having your own personal financial safety net. It's truly what we talk about when we say banking on yourself.

Ralph Estep Jr.:
02:56

So here's my first actionable step: If you haven't started building your emergency fund, I encourage you to start today! Even if it's just $5 or $10 a week, every little bit adds up. Think about it like this: if you put away just $10 a week, by the end of the year you'll have over $500 saved. While that might not seem like much, it's $500 more than you have saved now.

Ralph Estep Jr.:
03:19

So next, we have the "Budget Buster Buster." That's right. You heard me right, I said it. Sometimes the answer to our financial woes isn't more money but a closer look at how we're spending what we already have. Take time to track your spending for a month and see where your money's going. You might be surprised by what you find.

Ralph Estep Jr.:
03:39

I'm willing to bet you'll be shocked where your money's going, and it will give you the data you need to make the changes you need to make. This is the first step I take when I work with people in financial counseling sessions. And yes, I do offer financial counseling sessions to help you better manage your finances.

Ralph Estep Jr.:
03:57

In fact, right now if you join our email list, I'm going to send you a complimentary copy of my book. It's called "Mastering Your Finances." Just go to askralphpodcast.com and join our email list, and you'll get a coupon code, and the book is absolutely yours for free.

Ralph Estep Jr.:
04:11

So here's another actionable step. There are some great budgeting apps out there that can help you track your spending and identify those areas where you can cut back. Or if you prefer pen and paper, that works too. The important thing is to be aware of where your money is going. And as I always say, knowledge is the key to success.

Ralph Estep Jr.:
04:31

Now for those times when you need a little extra help, let's talk about the "Side Hustle Hero." Picking up a side gig can be a fantastic way to earn extra cash and help you reach your financial goals. Think about your skills and passions. What could bring in some extra income? Put those skills and passions to work for you. It will amaze you how you can turn those things into cold hard cash when you need them.

Ralph Estep Jr.:
04:57

So here's another actionable step. Take some time and brainstorm a list of potential side hustles. Could you drive for a ride-sharing service? Maybe offer freelance writing or even provide graphic design services? Could you sell handmade goods online? The possibilities are endless. I did a show just a few weeks ago about really interesting ideas for side hustles. So I encourage you to go back and listen for some real-life inspiration.

Ralph Estep Jr.:
05:22

So next up we have the "Family and Friends Lifeline." Now listen, I know this option isn't always ideal, but sometimes turning to trusted loved ones for a small short-term loan can be a viable alternative to those high-interest personal loans. The key to all of this is to be open and honest about your situation and have a clear repayment plan. Trust me, having honest and open conversation and make sure everyone is on the same page moving forward.

Ralph Estep Jr.:
05:51

So here's another actionable step. If you decide to borrow from family or friends, treat it like any other loan. Put everything in writing, including the loan amount, the interest rate if any, and the repayment schedule. Make it very clear from the beginning, so everyone understands all the expectations.

Ralph Estep Jr.:
06:09

And finally, let's not forget the "Credit Card Crusader." I know what you're thinking. "Ralph, aren't credit cards dangerous?" And you're right. They can be really dangerous if they're not used responsibly. However, if you have a good credit score and a solid plan for paying back the balance quickly, using your credit card for a short-term need can be a better option than one of those high-interest personal loans.

Ralph Estep Jr.:
06:33

So here's my final actionable step. If you do use a credit card, aim to pay off the balance in full each and every month to avoid interest charges. And remember, only charge what you can afford to repay. As I said last week in my episode about credit card perks, you should only use a credit card when you already have the money to pay the bill. Now, I know there are emergencies. But those need to be the exception and not the standard.

Ralph Estep Jr.:
06:57

So there you have it. Five fantastic alternatives to personal loans that can help you navigate those tricky financial situations without falling into that deep debt trap. Remember this: God wants us to be good stewards of the resources He's given us, and that includes managing our finances wisely.

Ralph Estep Jr.:
07:16

So today we learned about the importance of building an emergency fund, creating a budget, exploring side hustles, considering loans from trusted loved ones (again, with caution and clear agreements), and using credit cards responsibly.

Ralph Estep Jr.:
07:29

Now, I want to hear from you. What are some creative ways you found to avoid personal loans? Head over to askralphpodcast.com and share your thoughts in the comments section. And while you're there, don't forget to join our email list for exclusive content and updates and get that free copy of my book just for signing up.

Ralph Estep Jr.:
07:48

And don't forget to share this episode with your friends and family. There are a lot of people that could benefit from these tips. If you know someone who's struggling, share some love with them by sending them a link to today's episode or send me their email address and I'll reach out to them directly. Let's spread the message of financial freedom one episode at a time. Well, until next time, stay financially savvy and God bless.