I’ve seen plenty of news stories of how the government shutdown is affecting 800,000 or so government employees. What the news stories fail to mention is a large number of contractors are out of work too, until this passes. I can only guess on that number, but there’s no doubt it numbers in the millions, and little doubt it’s in the tens of millions.
As a former government contractor myself, I dealt with losing my job unexpectedly earlier this year, so some tips on dealing with an unexpected loss of a paycheck, even if it’s temporary, are fresh in my mind. There are five things you have to do.
I’m not here to gloat about anything. I’m here to try to help. Some of these things won’t be pleasant, but they’ll reduce pain in the long run if this lasts longer than a week. Keep in mind that everything I’m advocating is something I’ve done myself.
1. Take stock of what you have.
Hopefully you have some money in the bank or stashed away somewhere for emergencies. Not working and not getting paid this week is an emergency. Maybe you have another source of income, such as military retirement or rental property. That will make things go a lot easier.
2. Estimate the work stoppage.
When this happened in 1996, it lasted 17 days. Whether this one will be better or worse is anyone’s guess, but I would figure a month. That’s not a political statement; that’s planning for something bad yet within the realm of possibility.
Take what you have, plus what you can reasonably expect to have coming in, divide that by the number of weeks, and that’s your budget for the week. It’s not going to go very far. Toward the end of the week, my kids would tell me they were hungry, ask for their favorite thing to eat, then their second, then their third… Sometimes we’d get to their tenth choice and we might not have it. I hated that. But it’s what a parent has to do. Buy whatever combination of what’s cheap that everyone will still eat, buy enough of it to last a week, then repeat until times get less tough.
4. Cut back to make it last longer.
One story I read talked about a guy throwing football parties on Monday nights. He was buying food for next week’s party, then got to soda, and his wife nixed the soda. She’s nicer than I would be. I would be cancelling the party, or turning it into a potluck where everyone brings something. Your friends and family need to understand. What you don’t want to do is throw a party during week 1, have it drag on longer than expected, then find you’re out of money come week 4 and realize the money spent on that party could have bought groceries for week 4.
Look. One year I was out of work one Christmas. I won’t get into that story, except to say there wasn’t much under the tree that year. It would have been different if I’d known I would be starting a new job on Dec. 27, but I didn’t find that out until Dec. 26, so we had an austere Christmas. We survived.
But, seriously. One year there were two things under the tree and neither of them cost more than $5. If I can do that, one less football party won’t be the end of the world either.
Beyond that, look for scrappy ways to stretch those scarce dollars a bit further. Don’t drive anywhere unless absolutely necessary. Combine trips. Utilize free forms of entertainment, like the library. Cancel cable TV for a while if you have it. If you can do it without a penalty, cancel a cell phone and share one phone for a while. Those $40 expenses pile up really fast when there’s no income coming in. Going without stinks, but given a choice between a luxury and having food to eat, even a preschooler will choose food.
Speaking of food, food is a good place to save a bundle. Give Aldi a try. Aldi has a reputation for lower quality merchandise, and sometimes that’s deserved, but sometimes their quality is better. Resist the temptation to load up on carbohydrates and be sure to get sufficient protein and vegetables. Buy canned vegetables if that’s what you have to do. Eggs are a cheap source of protein, so make use of them.
5. Pay bills strategically.
I hope it doesn’t come to this, but you don’t want to fall behind on your bills, but if you do, be careful about which ones. Your mortgage or rent are the most important. Your car is only slightly behind. If you fall a couple of months behind on your utilities, you’ll face disconnection, but falling a month behind on your electric bill is a lot better than falling behind on your car or home. And it’s a lot easier to live without cable TV or telephone than without electricity. Credit cards fall somewhere between utilities and telephone or TV. Missing a couple of credit card payments isn’t the end of the world, but you’ll be paying penalties for a while afterward.
Know up front, early in the stoppage, that this is a possibility if the shutdown goes on too long. So it’s better to cut back at the beginning than to have to make hard decisions later on like which bill not to pay this month.