How to Survive a Government Shutdown
The 800,000 federal government employees out of work are facing the same question millions of financially-stressed Americans deal with every day: What now?
What do I do about rent? How do I pay my utilities? Or the food bill or the car loan or college tuition or even something as simple as buying a winter coat?
The Federal Reserve Board issued a report last year that said 40% of Americans can’t cover a $400 emergency expense. That means nearly half (probably more) of the furloughed workers are feeling a financial pinch.
Good news! Many financial businesses, especially those offering help for people in debt, recognize the severity of the problem and are doing something about it.
Etta Money, Chief Executive Officer of InCharge Debt Solutions, a nonprofit credit counseling agency that normally focuses on people with credit card debt, said her company has an answer for families and individuals struggling with the crisis.
“For years, our credit counselors have directed people to the nearest agencies or churches in their area where they can get immediate help with food, utilities, clothing and rent,” Money said. “We recognize that most people aren’t ready when a lay off happens, so we try to give them the immediate help they need to get through what hopefully is just a short-term problem.”
How to Survive the Government Shutdown
Money offers these short-term solutions for furloughed workers:
1. Contact creditors immediately.
If you are going to miss payments on credit cards, home or auto loans or any other monthly obligations, call your card company or bank or credit union. Explain your situation and ask them for temporary relief. Most are willing to help.
2. Draw up a crisis budget.
Ask yourself what creditors have to be paid immediately? Who can we put off for a month or two? Do we really need both cars? Should we eat all meals at home? Making a budget and finding expenses to cut will help keep you afloat.
3. Identify community resources.
Is there a food bank where you can get donated or reduced-priced food? Are there thrift stores in your area? Do civic groups or churches help with utility bills?
4. Find professional financial assistance.
A nonprofit credit counseling agency can help you review your budget, your debts and come up with an affordable consolidated repayment program. Nonprofit credit and budget counseling is 100% free.
5. Find Income Opportunities.
If you have maintenance skills that would be useful around a home or apartment such as painting or carpenter, ask your landlord to trade them in lieu of rent. Consider delivering pizzas or becoming an Uber, Lyft or Amazon Flex driver.
6. Sell unused items.
Nearly everyone has something of value – furniture, old car, musical instrument, collectibles – that could be sold.
Plenty of businesses have stepped forward with offers to assist federal workers through the shutdown. That group includes phone companies like AT&T, Verizon, T-Mobile and Sprint, who all have made a “flexible” payment plan that includes dealing with late charges.
Several utility companies are making similar pitches and credit unions are stepping in with options to take short-term, 0% interest loans or skip payments for a month.
Some federal employees have started taking unemployment benefits, but be careful with that. Congress and President Trump passed a bill in January that guaranteed furloughed workers would be compensated for the missed paychecks when the impasse ends.
If you receive compensation for missed paychecks and took unemployment, you will have to pay back whatever money you received from unemployment.
Also, Money warned, be cautious when spending money from those inflated checks you will receive.
“When you get a bigger paycheck than usual, there is a tendency to celebrate the occasion,” she said. “That’s fine to a point, but paying down your debts, especially credit card debt, should be at the top of your list.
“You also might want to start an emergency fund account and put some of the money there and contribute to that regularly. God forbid, but if this happens again, you want to be on the side of 65% who can handle a crisis like this.”