If a future government shutdown would affect your paycheck, make these 3 money moves now

If you work for the federal government or depend on work as a government contractor, then you probably breathed a sigh of relief when Congress managed to pass a 45-day budget just hours before the government was preparing to shut down.

We managed to avoid a government shutdown on October 1st, but we might be right back to square one on November 15. It’s even trickier now that there are two major obstacles: voting in a new Speaker of the House, then passing a budget, both of which have proven challenging this year.

If the possibility of going without a paycheck is weighing you down, NOW is the time to do something about it.

They say the best time to plant a tree was ten years ago, but the next best time is now.

The same goes for financial preparation.

It would have been great to get an emergency fund together years ago, but if you haven’t started yet, today is better than tomorrow! And 45 days is more warning than you will get in an emergency, so make the most of it!

Here are 3 things to do NOW if there is any possibility that a government shutdown would cause you to go without a paycheck.

#1 Ruthlessly Trim Excess Spending

Start by trimming down excess spending. Act as if the government shutting down in 45 days is a sure thing. If you knew your paycheck would disappear for an unknown amount of time, what would be your necessary versus unnecessary expenses?

You might think that your budget is already tight, but there is almost always one more thing you can scale back, especially if a lost or delayed paycheck forces the situation.

You don’t have to cut these things out forever, just for the next six weeks or so. If you decide you want to add the expenses back afterwards, that’s fine.

Here’s a list of ideas to get you started:

• Zero out your fast food and restaurant spending
• Cancel cable and/or streaming services
• Cancel subscriptions (Amazon, Audible, magazines, memberships)
• Spend $0 on entertainment
• Spend $0 on clothes
• Cut out meat
• Give up treats (for me, this would be the hardest)
• Cancel your gym membership and do free YouTube workouts instead
• Stay out of Target, HomeGoods, or your own shopping weakness
• Pause any home improvement projects
• Pause automatic contributions to investments (IRAs, 529s, etc)
• Pause extra mortgage or other extra debt payments

#2 Start an Emergency Fund

Trimming unnecessary expenses will free up money in your budget. Take all the money you would have otherwise spent and put it directly into your emergency fund. Don’t have an emergency fund? It’s high time to get one started!

Ideally, you want 3 to 6 months of expenses saved up to cover your regular expenses in an emergency. You probably won’t do that in just 45 days, but you will get started, which is the hardest part.

You need to have this money specifically earmarked as your emergency fund. Don’t just have it sitting in your checking account with all of your everyday spending money. It needs to be easy to access (not tied up in investments), but also hard to access (so it won’t accidentally get spent.) Look for a high yield savings account to get started.

#3 Make a Prioritized List of Upcoming Bills

Maybe it goes without saying, but I’ll say it anyway. When your paycheck stops, your bills won’t. You will still be on the hook to pay your rent or mortgage. Your credit car bills will still be due and so will your student loans. You’ll have to pay the electric bill to keep the lights on and and your cell phone bill to stay connected.

Make a list of your bills, their amounts, and their due dates, then put them in the order that they are due. Add them up to get an idea of what it will cost to keep you financially afloat during the time you expect to miss your paycheck.

Keep in mind that these bills with due dates do not include everyday expenses like groceries or gas, so your actual costs for financial stability even without a paycheck will be higher than the sum of your regular bills.

After figuring your total expenses and seeing what your finances will look like without a paycheck, you might want to revisit step #1 above to see if there are other areas of excess spending that you are now willing to temporarily cut.

Does it really matter?

What if everything resolves nicely and the government doesn’t shut down?

That would be great!

But even if there is no shutdown in November, your work on these 3 things won’t be for naught.

You will have the beginning of an emergency fund! You’ve planted that tree!

Keep adding to it and you’ll be in an even better position when the next disruption happens. Whether it’s a job loss, health issue, natural disaster, pandemic, family emergency, or government shutdown, you’ll be ready!

Your preparation will bring you peace, lower your stress at an already stressful time, and allow you to care for your family even when life is incredibly hard.

I promise that your efforts will be worth it! You can do this!

Bonus: Start building your pantry storage

If you’ve read this far, you deserve a bonus tip. Here you go.

Food is a major expense for every household. What if you could handle the next crisis without having relying much (or at all) on the grocery store? Building up your pantry storage will be a huge asset when times get tough. Having food available will bring comfort and peace of mind rather than adding to your stress.

I know this firsthand because during the first three months of the COVID-19 pandemic, we bought no food. No grocery store trips. No home food delivery. We decided to live off of our pantry and long-term food storage. It did require some flexibility–who knew that we would run out of chocolate chips so fast! Some things worked better than others, so we made some changes to our storage. Want all the details? We documented our entire Quarantine Food Storage Challenge through blog posts and videos.

If you’d like to increase your food independence with smart, real-world grocery shopping techniques, the video below is a great place to start.

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