And, let’s remember that the shutdown, which began Dec. 22 and ended Jan. 25, affected only part of the federal government. It impacted about 800,000 workers, including active-duty military members. Although federal workers were eventually paid retroactively, many contractors and other businesses relying on spending by the government or federal workers will not get back lost pay or revenues.
There will surely be more shutdown showdowns. Are you prepared for another budget tug of war? If not, here’s some advice to help make it through.
• Stash some cash. After things get better, it’s so easy to forget how bad things were.
Building an emergency fund loses its urgency when people begin to get paid again.
Experts recommend saving three to six months of living expenses. For example, let’s say you spend $3,000 a month to run your household — mortgage/rent, utilities, food, insurance, cable, etc. Multiply that amount by three to get a three-month goal of $9,000.
But if you live paycheck to paycheck, that’s likely a daunting amount. So, reach for something more reasonable. Try to accumulate at least one month of expenses. You have from now until Sept. 30, when the budget expires.
If you can’t save a full month of expenses, then put aside enough to cover major expenses, such as your rent/mortgage, car payment and food.
• Find a friendly financial institution. Many banks offered assistance to federal employees and contractors affected by the shutdown. Some institutions proactively waived overdraft fees and monthly account fees. Others allowed customers to skip a mortgage payment.
If you asked your financial institution for leniency and didn’t get any, find another banking relationship. If you don’t belong to a credit union already, consider joining one.
Credit unions issued $46 million in low- or no-interest loans to more than 60,000 credit-union members affected by the shutdown, according to the Credit Union National Association.
• Get clarity on side hustles now. Last month, the Office of Government Ethics issued a legal advisory with guidance about permissible and prohibited actions by furloughed employees when it comes to outside employment, accepting gifts and using crowdsourcing sites such as GoFundMe to raise money.
“There is no government-wide restriction on outside employment for career employees,” wrote Emory Rounds, director of the Office of Government Ethics. “However, employees may not accept outside employment that would conflict with their official duties.”
Over the next several months, another budget battle is likely to ensue, and it will be federal workers, contractors and other businesses that rely on federal employees who are likely to lose. Their pay will be the toy that the politicians use to play their game.
Maybe the administration and Congress will reach agreements to avoid a government shutdown. But it’s better to be prepared for the worst.
