When your finances are strained, making the right money decisions is critical. To better navigate tough times, ask yourself these three questions.

How much of an emergency fund is necessary?

The answer

Even a few hundred dollars can protect you. Don’t be discouraged if you don’t have an emergency cushion or if you feel very thin.

“Families with a savings cushion of $ 250 to $ 749 are less likely to be evicted, receive public benefits, and lose a bill after losing their job,” says Signe-Mary McKernan, vice president of the Urban Institute. Research by that Washington, DC think tank found that less than $ 1,000 is enough to help families cope with a financial crisis.

“Even small amounts of savings can make a difference, and we found that low-income families with savings are more resilient than middle-income families without savings,” says McKernan.

What you can do

McKernan suggests setting up automatic savings from your paycheck (even 2% will add up over time) and saving any windfalls, like a tax refund or bonus.

How does the balance of a credit card affect my credit?

The answer

Relying on credit cards It can act as a financial bridge when money is tight, but paying at least the minimum on time is critical to protecting your credit standing.

“Your credit score is like your report card,” says Lauren Anastasio, a certified financial planner for SoFi, an online financial services company. “Every month that passes is an opportunity for you to have a positive data point.”

What you can do

Because late payments hurt your score the most, pay at least the minimum before the due date.

If possible, pay more than the minimum so you can reduce balances over time. The second largest influence on your score it is the amount of your credit limits that you are using, so increasing balances can affect your score. But that damage quickly fades as you pay them back.

Pay off the cards in full if you can, because maintaining a balance is not necessary for good credit. “I’m amazed at how many people say they don’t pay their credit card because they think it will help their credit,” says Anastasio.

Should you take money from your 401 (k)?

The answer

Taking money from your 401 (k) will stunt your retirement savings because that money no longer generates compounding returns.

“Any loan you take from a 401 (k), those are funds that will not be invested while you are paying yourself,” says Anastasio. “Even though you are borrowing against assets that you have accumulated, these are funds that are designed to be appreciated over time, so there is that opportunity cost.”

And if you can’t pay a 401 (k) loan on time, taxes and penalties take effect if you’re under age 59½.

What you can do

You may have a few options that won’t interfere with your future retirement plans:

  • Personal loans: unsecured personal loans they are a good option for those with good to excellent credit scores and generally range from $ 1,000 to $ 50,000.

  • Credit cards with a 0% period: also for those who have good to excellent credit, cards with periods of 0% APR, which usually last between 12 and 15 months, give you access to credit without paying interest.

If you need instant cash, services like Earnin and PayActiv can provide an advance on your paycheck without starting the cycle of debt that high-interest payday loans or car title loans often cause.