January 8th marked my 11th anniversary as a federal government employee. My country’s gift to me was a government shutdown and notice that I would not receive my next paycheck.
Although we are in the third week of the shutdown, my family and I are not panicking yet. Unfortunately, almost 80 percent of U.S. workers are living paycheck to paycheck and cannot say the same. Some federal employees have already started GoFundMe accounts or quit their job to pursue a paycheck elsewhere.
If you are affected by the government shutdown, this blog will give you tips on how to survive these trying times. This guidance is also useful for anyone living paycheck to paycheck. Take note so you can be better prepared for your next emergency or any loss of income.
Cut Unnecessary Expenses
Use this opportunity to review how you spend your money. Before you make another payment or purchase, prioritize your expenses. Pay first any bills that are critical to your household. This would include rent or mortgage payments, utilities, healthcare expenses, and food.
Cut from your budget anything that is not essential like streaming subscriptions, cable, or retail shopping. Eating out should be minimized too since you can buy several meals in a grocery store for the amount you may spend to eat out. If want to dine out, start with restaurants that are giving free meals to government employees impacted by the shutdown. I have already had two free pizzas at &pizza in Washington, D.C.
Despite your tighter budget, don’t compromise the quality of food you eat. That will only cause you health problems later. Instead, start using coupons or shopping apps like Ibotta to save money on groceries.
Check Out: Habits of Financially Savvy Women
Use your Reserves
Everyone should have an emergency fund with enough money to cover three to six months of your monthly expenses.
Loss of income is an emergency and a good reason to dip into your emergency fund. After you have cut unnecessary expenses, if you still cannot make ends meet, then you need to use your reserves. Spend your emergency funds sparingly and only on essential expenses.
If you run out of emergency funds, look at other areas where you may have significant savings, such as your retirement account. Spending your retirement funds should be a last resort. If you do borrow from your retirement account make plans to pay it back as soon as possible.
Hardship is a justified reason to borrow from most qualified retirement accounts. Just be careful how you take out the money. If you request a loan, you will have to pay it back when you start getting paid again. If you withdraw money with the expectation not to pay it back, you will have to pay Uncle Sam a 10 percent penalty plus income taxes on the money if you are younger than 59 1/2.
Unessential expenses will have to wait
If you are struggling to pay other bills like credit cards, contact your creditors and explain your situation. Companies like American Express, Chase, and Discover are giving customers a break on interest and their next payment. But you must contact them before you miss a payment to avoid impacts to your credit!
Also, check with your bank or credit union for assistance. My credit union is offering zero interest for two months on new credit cards. I would normally not advise you to run up credit card debt when you are not being paid, but if the expense is essential–do what you have to do. Then immediately pay off the balance when you get paid.
Sell What You Don’t Need or Can Replace
If you are furloughed and looking for things to do around the house, start decluttering. Look for items that are no longer worth much to you but might be valuable to someone else. Give that item a price tag and sell it! To find local buyers use websites like Craig’s List or apps like Letgo.
Be ready to negotiate with sellers but don’t have second thoughts about the sale. Remember you are creating income for your family. You can always replace the items down the road when your finances are back in order.
Work on Your Side Hustle
They say most millionaires have seven streams of income. And there is a good reason for that. When one stream of income is interrupted or lost, they have other means to make money. No one should rely on one source of income, including government workers.
As a result of the government shutdown, many people have started side hustles. Two furloughed sisters started a cheesecake business and are already shipping their desserts across the United States.
If you do have a passion you want to transform into a business, now is the time to work on your business plan. Use the library, mentors, and friends to help you transform your dream into a reality. Maximize every opportunity to learn whether through books, webinars, or interviews with those that have been successful at what are trying to do.
If entrepreneurship is not for you, apply to part time jobs to make extra money.
Don’t forget about your skills and talents. Start freelancing in fields such as blogging, graphic designing, or accounting. Upwork is a great site to look for available opportunities for free. Pursue jobs that require little to no upfront investment.
Claim Your Benefits
When you are furloughed you are entitled to unemployment benefits. Each paycheck you paid into the system for the opportunity to claim unemployment when you need it. Don’t be ashamed to apply for your benefits. Just note, if the government reopens and Congress authorizes back pay to everyone, you will have to repay the money received.
If you belong to a church or another community organization see what they are providing members as well. Many organizations are rallying together to help their own, and you could qualify for assistance too. Don’t be afraid to ask for help.
Keep It Movin’
As the saying goes, “This too shall pass.” If you are furloughed use this time to reflect and finish projects you have always lacked the time to complete. This will keep you busy and productive. Find ways to keep up self-care too. Take walks around your neighborhood or start daily meditation. Find as much free fun as possible.
Stay strong folks and hang in there. No one knows when the government shutdown is going to end so take advantage of this advice now.
When it’s over do your best to save more. Replenish your emergency fund starting with your next paycheck. Get ready just in case we face times like this again.
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