7 Ways to Avoid Getting into Debt Because of an Emergency ...

1. Ask for an Advance at Work

Asking for an advance on your paycheck is one of several ways to avoid getting into debt. Some employers are extremely accommodating in this respect, as long as employees don't abuse this provision. Basically, your employer cuts you a check for a specific amount, and then deducts this amount from your next paycheck.

2. Borrow Cash from Relatives or a Friend

If you don't want to get into debt and you don't have any other alternatives, ask a friend or relative to borrow money. Often times, those in your close circle may lend money without interest. And depending on how well off the person is, he may not require repayment. Of course, you should expect or ask for this provision — but if it's offered, there’s nothing wrong with agreeing to these terms. Just make sure you get it in writing.

3. Ask for a Payment Extension

If you need work on your house, ask the contractor to extend your payments over several months. This way, you can pay a little over time and avoid using your credit card. If you're able to pay the balance within a few months, the contractor may not charge interest, or charge very little interest.

4. Sell or Pawn Something

Desperate times call for desperate matters. Look through your house and think of items to sell. If you have gold lying around, you might be able to get hundreds for your unused jewelry. You can also pawn electronics, furniture or clothes. Take items to consignment, have a yard sale or post ads online.

5. Dip into Your Retirement Account

As a last resort, consider dipping into your IRA or 401(k). They are several options available. With a 401(k), you can take a hardship loan and repay your retirement account through payroll deductions. Or you can withdraw money directly from your retirement accounts and pay a penalty plus income taxes on the withdrawal.

6. Cash in Life Insurance Policy

If you have a whole life insurance policy and it has accumulated a cash value, you might be able to borrow from this policy to handle your emergency. You can pay back the policy over time, or have the amount borrowed deducted from the death benefit paid to your beneficiaries.

7. Prepare in Advance with an Emergency Fund

The best way to avoid going into debt after an emergency — build an emergency fund. A nice sizable fund is 3 to 6-months of income. To get started, deposit 10% of your paycheck into savings, plus any windfall you receive, such as a tax refund, gift money, bonuses or an inheritance.

You can't predict an emergency, therefore it's best to have money on hand just in case. Whether you're able to save $1,000 or $10,000, something is better than nothing. What are other ways to avoid getting into debt because of an emergency?