The government shutdown is entering uncharted territory. After 30 days and counting, there’s still no inkling as to when federal employees will go back to work with pay. Times like these make it hard to afford daily life, not to mention the devastation it creates to your long-term financial strategy.
Let’s be clear: this is not your fault. But the reality is, it’s still up to you to figure out how to stretch your budget and make ends meet – today, tomorrow, and months and years from now.
Don’t let the national government crisis turn into a personal financial tailspin. This survival guide can help you take control of your money and debt until normalcy returns to the White House.
Paying Your Bills
Without a paycheck, you may not be able to pay all your bills. If this is the case, you’ll need to decide which creditors will get paid and which ones won’t.
It’s not an arbitrary decision:
First, start calling every single person you pay a bill to (starting with the highest). Major lenders and creditors like Discover, Bank of America, and Wells Fargo have already announced their intention to work with federal employees affected by the shutdown, including deferring payments and waiving late fees.
Focus on paying the bills which you cannot defer or where the creditors aren’t able or willing to work with you. Bills that are essential for daily living, such as rent or utilities, should also be prioritized.
Tightening Your Budget
If you’re not getting a paycheck, you need to plug as many cash leaks as possible – you don’t know when you’ll start getting paid again!
Tightening your budget isn’t just about eliminating discretionary spending. Some necessities like gas, food, and power may need to be cut for awhile. Rely on ridesharing or public transportation to get to and from work. Slash your grocery spending by buying only the essentials for meals. Keep the heat low and rely on layers of clothing, blankets, or fires.
Programs like SNAP or food stamps are guaranteed to continue through February. But benefits may be reduced or eliminated if the shutdown continues into March. If you rely on these benefits, try to stock up on non-perishable essentials like rice, pasta, and canned goods for a worst-case scenario.
Also, restaurants across the country are making headlines offering free food for affected federal workers. Here’s a detailed list of restaurants that have joined the movement so far.
Tightening your budget still might not free up enough funds to pay your bills and afford daily life. Once you’ve cut as many expenses as possible, check in your local area to see if any businesses or organizations are offering assistance.
Protecting Your Credit
If you’re not able to pay all of your bills during the shutdown, you may be wondering, ‘What will happen to my credit score if I miss a payment?”
Or, to add another layer of complexity, “Will my inability to pay my bills during the shutdown affect my future access to credit?”
Protecting your credit when you have no paycheck isn’t an easy situation to navigate, but it’s not impossible, either.
News outlets have reported that several federal and state financial institution regulators are encouraging lenders to work with furloughed and unpaid workers affected by the shutdown.
If you haven’t done so already, you need to contact your bank and creditors to let them know you’ve been affected financially by the shutdown. Some lenders have procedures in place to help furloughed workers or others affected by unforeseen circumstances.
For example, some lenders may offer to set up a deferred payment plan or temporarily place your loan in forbearance. This means that you will have temporary relief from full loan payments, which in itself does not impact your FICO score.
Earning Side Income
If you’re having trouble making ends meet or want to avoid dipping into emergency savings, there are tons of ways to earn a little income on the side.
Side hustles are running rampant, from driving for Uber and Lyft to delivering food and groceries.
Anyone can sign up for platforms like Uber Eats or Grub Hub and make some extra cash in your newfound free time. A new app called TAKL is the perfect place to offer services like cleaning, moving, hauling away trash, hanging pictures, and other home needs. Online cash surveys, cash-back sites like Ebates or Ibotta, dog-walking and pet sitting, and online auctions won’t make you rich, but they can help fill in the gaps.
If you’re a furloughed worker, you could be eligible to receive unemployment benefits (employees categorized as “essential” are not eligible). Once you apply, it may be a week or two before you start receiving benefits, so don’t rely on this as a immediate source of relief. But it can help to replenish your bank account once money starts coming in.
There was some debate about tax refund checks being issued during the shutdown, but rest assured the IRS is still fully operable. If possible, do your taxes early to get your refund as soon as possible and use it for daily expenses. It might not be the way you planned to use your refund, but it can keep the lights and heat on and prevent you from sinking further into debt.
The Government Shut Down – Your Life Shouldn’t Have To
Just because the federal government shut down doesn’t mean you have to put your finances on hold. More than 800,000 workers have been directly affected by it, but the financial consequences will impact millions more.
Keep in mind that this isn’t the first time the government has shut down, and it likely won’t be the last. Put these financial tips to good use now and remember them for the future.
Got questions? Send them my way and I’ll help you navigate this financially stressing moment in history.