The news of a government shutdown can send a wave of panic through federal employees and contractors. The uncertainty of a delayed or missed paycheck is stressful, but you are not without options. Having a financial “parachute” plan is the single most important step you can take right now to weather this disruption.
Here is your essential guide to stabilizing your finances and finding immediate relief.
1. Act Fast: Create a Bare-Bones Budget
The first, non-negotiable step is to get a crystal-clear picture of your money. You need a shutdown budget.
Triage Your Spending
Immediately identify and prioritize your “Four Walls” (essential expenses): housing (rent/mortgage), food, utilities, and essential transportation.
Slash Discretionary Spending
Temporarily pause or cut non-essentials. This may include streaming subscriptions, dining out, entertainment, and extra payments toward debt. Every dollar you save now is a dollar you won’t have to borrow later.
Evaluate Your Emergency Fund
Know the exact number of weeks your savings can cover your essential bills. This number provides the clarity you need to move forward.
2. Contact is Key: Talk to Lenders and Creditors
Do not wait until a payment is past due. Financial institutions and service providers are well aware of the situation and often have established assistance programs for affected federal workers.
Financial Institutions
Immediately call your bank or credit union. Many, particularly those that serve the military and federal community (like Navy Federal, USAA, and federal credit unions), offer special support, including:
- Interest-Free Paycheck Advance Loans.
- Temporary Fee Waivers (e.g., overdraft fees).
- No-Penalty CD Withdrawals.
Housing & Loans
Contact your mortgage lender or landlord. Ask about hardship programs, payment forbearance, or temporary payment plans. Do the same for your auto and student loans.
Utilities
Many electric, gas, and water companies offer flexible payment arrangements for customers facing a temporary loss of income.
3. Income Bridges: Explore All Safety Net Resources
While you wait for Congress to reach a deal, look into every available source of financial assistance for federal employees.
Unemployment Insurance (UCFE)
Furloughed federal employees are generally eligible to file for Unemployment Compensation for Federal Employees. Though back pay is usually guaranteed (meaning you’d have to repay the benefits later), filing now can provide crucial income when you need it most.
Non-Profit Assistance
The Federal Employee Education & Assistance Fund (FEEA) often activates emergency grant and loan programs for employees impacted by a shutdown. Search for local community support by dialing 2-1-1 or visiting 211.org.
Temporary Work
Consider short-term, flexible side jobs, often referred to as “gig work,” to generate income and bridge the gap until you receive your back pay.
4. The Last Resort Rule: Protect Your Future
Be extremely cautious when considering solutions that compromise your long-term financial health.
Avoid High-Interest Debt
Stay far away from payday loans or car title loans. The predatory fees will only deepen your financial hole.
Think Twice About TSP/401(k)
Tapping into your Thrift Savings Plan (TSP) or other retirement accounts should only happen as an absolute last resort. Loans or hardship withdrawals can trigger penalties and permanently damage your retirement savings growth.
Your Trusted Guide: How Parachute Credit Counseling Can Help
Facing an income disruption makes you feel like you’re in a financial freefall. That’s where non-profit credit counseling steps in to be your guide.
Certified financial counselors at an organization like Parachute Credit Counseling can provide a non-judgmental, objective view of your situation. They can specifically help you:
Refine Your Shutdown Budget
They’ll work with you to master your cash flow and ensure every dollar goes toward essentials.
Navigate Debt
If you have credit card or other unsecured debt, they can provide debt management solutions and even intercede on your behalf.
Create a Repayment Plan
They’ll help structure a realistic plan for managing bills now and repaying any short-term loans once your back pay arrives, helping you land debt-free.
Don’t wait until the stress becomes overwhelming—reach out for confidential support now at 1-800-926-9685.
By taking these steps proactively, you can deploy a robust financial parachute that protects you and your family until your regular paychecks resume. You have options—use them!
If you’re dealing with high interest debt payments as well, see what you can save with Parachute’s Debt Management Plan:
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