How To Prepare For A Government Shutdown Bonus Resource List

Sep 25

Written By Sarah

You can watch my full YouTube video on this topic here!

The US government is facing a looming deadline of September 30, 2023 to approve the upcoming budget for federal agencies, so they can keep the government open and funded. Thanks to a 1980 interpretation of a law written in 1884, if lawmakers can’t agree on the budget for the upcoming fiscal year (or pass a temporary funding bill), the government must furlough all but essential federal employees and military personnel until the budget is approved. Currently, politicians are still gridlocked, and are running out of time to get funding bills passed that will keep the government running.

It seems like every fall we see threats of government shutdowns in the news, as US lawmakers bicker over spending priorities. While government shutdowns make for worrying headlines, the longest one we’ve had so far was in December 2018 which lasted 34 days. Government shutdowns can cost billions of dollars each time they happen. Typically, lawmakers are able to reach some kind of stopgap measures, but each time they let it get down to the eleventh hour before making any compromises.

If you’re likely to be affected by a government shutdown, how can you get prepared now?

1. Don’t panic. While government shutdowns (or the threat of them, at least) seem to be constantly in the headlines, there have only been 10 since 1976. The longest shutdown in US history has lasted 34 days. This was in December 2018-January 2019, and finally ended when unionized FAA air traffic controllers went on strike on the East Coast to protest working without pay. Politicians from both major parties generally agree that government shutdowns are bad for the economy and typically try to avoid them, although they do tend to let it get down to the wire. Stay calm and don’t let the headlines rattle you too much.

2. Have a financial safety net & shutdown plan. If you’re in a job that is furloughed or required to work without pay during a government shutdown, be ready with a backup plan if your family has to go without pay for several months (worst-case scenario). Make sure you have enough money in your emergency savings account to cover 1-3 months (minimum, 6 months is best) of your basic living expenses. These include: rent/mortgage payments, car payments, groceries & pet food, gas, utilities, and healthcare premiums. When you see the threat of a looming government shutdown in the headlines, immediately stop spending on ALL non-essential items, and save that money until you see how things go with the shutdown.

3. Contact your financial institutions, lenders, insurance companies, utility companies, HOA, etc. If you’re concerned about not having a paycheck due to a government shutdown, reach out as soon as possible to your bank to ask about grace periods on mortgage payments, loan payments, and credit card bills. Your utility providers, insurance companies, and HOA (Home Owner’s Association, if you live in one) may also have deferred payment options for bills and dues given the special circumstances, so call around and check on their policies before a shutdown happens. If you’re a tenant, talk with your landlord about the situation and see what options you have so housing isn’t a worry. All these steps will give you peace of mind knowing what your options are ahead of time.

4. Reach out for help & resources. If you’re in the military, there are a number of resources available for you and your family. Check with your the family readiness center at your base, or look into some of these military relief organizations. If you’re a member of USAA, they have an excellent payday loan option available during government shutdowns, so look into that if you need it. Check out USAA’s current membership options for non-military members as well to see if you can open an account with them to take advantage of this service. If you’re a food stamp beneficiary and SNAP benefits are suspended (which hasn’t happened during any shutdown in history yet), reach out to your local food bank for assistance to help bridge the gap. It is very stressful being in a situation where you’re not sure how long you will be without pay, so reach out for support from your family, friends, and local community during this time as you need to.

5. Research your state’s unemployment benefits. Chances are the government shutdown would be over before state unemployment benefits would kick in (typically between 7 and 21 days), but it’s worth considering. Every little bit helps when your paycheck suddenly stops coming in, so find out what benefits your state can offer you during a shutdown. It’s important to be aware, however, that in most cases you will be required to return your unemployment money to the state once the government reopens and you receive back pay owed to you.