In light of the government shutdown this week, I’d like to share with you some things I have learned about what to do when a paycheck suddenly disappears.
I have been affected by a government shutdown once before.
My father began his career as an artillery surveyor in the U.S. Army and then joined the National Guard and worked a civilian service job until his retirement. I was a high school senior during the last government shutdown. I remember my parents struggling when my father’s paycheck didn’t arrive on time. Credit card balances grew, fights grew more frequent and the situation was bleak. It took a while for my parents to recover financially.
Eventually I grew up, went to college and met a guy. Four months after we married, he visited a recruiter’s office with the intention of joining the National Guard.
Instead, he signed up for active duty and our own journey with the government began. My husband served more than six years in the Army and left the service as a staff sergeant. After leaving the Army, he became a civilian contractor at Fort Gordon. Today, my husband is in Afghanistan, attached to a unit to provide support to their mission.
Thankfully, my husband is considered essential personnel and the shutdown won’t affect us this time, but the same cannot be said for many of our family members and friends. My heart goes out to any government and military family worried right now.
For the sake of disclosure, I am not a financial advisor, but my background is in the social work field and I have taken personal finance classes in order to further my own education. Your situation might vary so it’s always wise to seek a second opinion.
How can you survive if you are a paycheck-to-paycheck family and suddenly you don’t have a paycheck coming in? According to the Federal Reserve and the Internal Revenue Service, the average American family savings account balance is $3,800 and only 38 percent of Americans have an emergency fund to fall back on. That means most families can’t last long without a paycheck.
When faced with a crisis, focus on the family’s basic needs. Food, water, shelter, lights and a basic form of communication are needs. Everything else not necessary for survival can wait.
The first thing you have to take care of is food. Keeping expenses down is possible if you stay on a budget and stay out of a restaurant. Take this time to use up your pantry as much as possible. If you are lucky enough to have a stocked pantry, it will keep your grocery bill low and give you more time.
You can also stretch your food budget by visiting a food pantry. Most local food pantries allow one visit without proof of financial problems, so if your crisis came suddenly, you don’t have to wait on documentation to get help. If you are a retiree, then you qualify for senior meal assistance, too.
After you get your food budget set aside, the next thing you must take care of is water. You have to take baths, wash clothes, drink and cook with it. It is imperative that that bill stays current. To keep that bill as low as possible, shut off any unnecessary usage such as yard maintenance.
After the food and water, you must have a place to sleep and electricity to maintain it. Many people don’t realize how quickly foreclosure proceedings can start. If you can make that payment, don’t get behind. Credit card late payments will make a much smaller ding in your credit report than a foreclosure would.
If you can, try to keep up your electric and phone bill. Hopefully, the crisis will not last long and payments on any other bills can be caught up quickly. I hope these tips will help you keep your household up as long as possible. You are all in my thoughts and prayers.