Finding emergency money in a difficult economy
Emergency money can be hard to come by for consumers having financial problems. The recession has hurt businesses and individuals. Its left both with huge shortfalls in budgets and few options to make money stretch. One thing increasing numbers of consumers are using to find extra cash is selling gold. Although the prices advertised for reselling gold are not accurate, it is still a way for people to find some extra money to work with.
How much is gold worth?
When it comes to how much a consumer can get for gold, there are a few factors to work into the equation. First of all, buyers melt the gold so they won’t be concerned with the artisanship of the gold and they won’t pay more for ornate pieces. Secondly, they have to pay a third-party smelter to melt the jewelry down so the price you get will be lower to take that into account. Finally, some gold is more precious than other gold. For example, 24K gold is considered purer than 12K gold and will be more valuable.
Mail-in gold buyers
GoldPaq, GoldKit and Cash4Gold are three companies that advertise heavily. The premise is simple. Consumers request a prepaid envelope, drop their gold in, mail it back and they send a check. If the price returned is not sufficient, the seller has the chance to return the money and get their gold back. These companies are convenient and quick. Thousands of people used the services in past months, especially when the recession was most felt by the consumer market. The drawback is that consumers carry the cost of the convenience. These companies can charge anywhere between 11 to 29 percent for their service.
Jewelry and coin shops
A lot of jewelry and coin shops have set up business in local neighborhoods. They tend to be the highest paying for jewelry and can offer up to 70% of the actual value of the gold. For any consumer looking to maximize their emergency money fund from gold, this can be the best option. In particular people with fine jewelry can benefit from these shops. The drawbacks are that there are still some jewelry shops that know consumers in general aren’t educated on the worth of their pieces. They will offer prices that are much lower than market value. The best thing to do is to be armed with some research on what the gold is actually worth before going into one of these shops. If consumers are offered a much lower estimate, they should pack up and go to the next jewelry shop.
Pawnshops also buy gold
Since the recession began, many pawnshops are buying gold. They will test gold for quality and authenticity before paying out, but if the pieces are valuable, consumers can walk away with a good price. The good news about pawnshops is that if the need for money is subdued, or if a consumer changes his or her mind, they normally can buy back the gold. It will be for a higher price than they got for the sale, but the option is available for a good window of time. The main drawback of pawnshops are that they normally are situated in sketchier parts of a town.
Selling gold wisely
Like anything else, consumers need to arm themselves with some market research before selling gold. It can be an easy way to create emergency money, but getting the right amount is crucial to the transaction. Paul Montgomery, president of the Professional Numismatists Guild, said “You wouldn’t sell a car, boat or any other asset without doing some homework and learning about what you are doing. If something doesn’t seem right, it probably isn’t.”
