The United States just ended its 15th federal government shutdown since 1981, when the Attorney General first interpreted budgetary law to permit such actions. Most have been brief, only lasting from one to five days. There were two previous shutdowns in 2018, lasting from several hours to three days. However, this particular one has gone done as the longest in history at a record 35 days.
After a month without pay, federal employees, those who receive services from the affected government agencies, and those that are connected financially by other means, are feeling the crunch. As the days pass, the need to "tighten the belt" is resulting in fewer and fewer holes left to buckle, and money is now an emergency situation.
Surviving the Shutdown
For those feeling the crunch as a result of the shutdown, here are some general tips for getting into "survival-mode" with your budget.
Cut Expenses Now
The first thing to do is lean-out your current expenses. Write down all of your monthly expenses and figure out where you’re spending and where you may be spending unnecessarily, especially in areas you may not have considered, previously.
For example, rather than buying another box of checks from the bank, consider using your home printer to print checks yourself. There are professional sites like Checkeeper that let you test drive their services for free and are super easy to use. You can save money by using your own ink and paper to pay your bills, and Checkeeper will even sync with most accounting software to make sure you are keeping on track.
When it comes to daily expenses like gas and groceries, it may make more sense to forego the fancy coffee from the coffee-shop and stick to a home-brewed cup. If you have the time and your location offers, this may be an opportunity to support your local public transportation system and save some gas money in the process. You may find you make one mean cup of coffee, and having someone else drive you to your errands gives you that ever-elusive opportunity to catch up on your social network! Yes, these are silver linings, but sometimes hardship can open opportunity where it was hidden, before.
Request Delayed Payments or Forbearance
You may consider calling your mortgage company or bank now to find out if a delayed payment or even skipped payment to add to the end of your loan would be an option. The same goes for your utilities, credit card, and car payments. A phone call and description of your circumstances may be enough to stave off a payment, or create a payment plan that will leave a little more breathing room for essentials like food and medicine. Additionally, most student loan providers will grant temporary forbearance for financial crises. As the case with the others, they would most likely rather get paid later, than not at all.
The OPM (US Office of Personnel Management) has a sample letter on its website for employees who are in a tight spot financially because of the shutdown and need to discuss payment arrangements with their creditors. Agencies such as DOT also offer similar templated letters for employees to use. But keep in mind that “this letter does not guarantee the creditor will extend the payment schedule but many creditors have indicated they will work with Federal employees who are affected by the shutdown.”
In all circumstances, it is best to call before the next possible missed payment for options so that you won't be in a late payment situation that will affect your long-term credit.
Visit OPM.gov to see the operating status of the federal government. As long as the federal government is shut down, you’ll see this notice: “Due to a lapse in appropriations, federal government operations vary by agency. Employees should refer to their home agency for guidance on reporting for duty.” As of Dec. 26, the Office of Personnel Management said social media channels may not be monitored or updated because of the shutdown, but so far the agency has shared steady updates. In addition to OPM, make sure to check your agency’s website and social accounts for any new updates.
After the Storm
Hopefully, you will weather this financial storm and will have used your budgeting prowess to champion through to the other side. The next step is to be adequately prepared for future squalls that may come your way.
Revisit your budget
The first thing I would do is make a list of expenses that you want and can afford now, but would easily be cut in the future if there’s an emergency. A good example is a gym membership. Maybe today it makes sense for you to have because you use it and you can afford it. But if you lose your paycheck, it might be the first thing to go.
Do this for all similar types of expense. Note what the expense is, how much it costs, and any relevant details to cancel it–including terms of the contract, cancellation fees, and phone numbers to call to cancel. Think of this as your emergency guide to saving money.
While cutting back on coffees may seem like a lot, it may not be enough. Can you look at refinancing to lower mortgage payments? Should you trade your vehicle in for something with better gas mileage that will lower everyday cost, or have lower payments, itself? Focus on items that will have big impacts on your budget now so if the time comes, you’ll be ready.
If you’re a government employee, use the tips above to help focus your trajectory and utilize any resources available to assist you through. If you’re not, be mindful of those who are out of work right now and seek out how you can support friends, family, and your community.