What to do when your household has a shutdown?
You have to physically be living under a rock not to know that right now the country is currently experiencing a government shutdown. That means that a lot of people paid by the government and companies funded by the government have not received any money since December 22, 2018. There are people sharing that they are stressed because they cannot pay their bills, need GOFUND contributions, and are in need of loans to make it through. If you are unable to pay your bills after a month of not receiving pay, (government shutdown or not), then that means you have not created an adequate savings or emergency fund.
If you aren’t impacted by the government shutdown, let’s but could not survive a month without pay, then it is still a household shutdown. To prevent a household shutdown, start by asking yourself these questions:
- What happens if I am not paid for a month?
- How do I prepare myself, family, and household?
- What will I need to do sustain if I am not paid for a month?
In order to successfully survive a household shutdown, you have to position yourself not to live paycheck-to-paycheck. If your money stopped today, would you be able to live stress-free for 6 months or longer? If you do not have at least 6 months of savings to get you to through then you are not prepared for the shutdown.
Here are a few things to do to be prepared to avoid the impact of a household shutdown:
- Have A Financial Plan. If you have a financial plan, keep it updated. If you do not have a financial plan, create one today. It is important that you have a financial plan so that you can prioritize the expenses associated with the lifestyle that you live. Within your plan, decide what expense have to be paid and which expenses are luxuries and do not have to paid. Have a list of your total expenses and a list of your must pay expenses. The must pay expenses, will be the basis for your household shutdown emergency fund.
- Start Saving NOW! As mentioned before, having a savings is a huge part of avoiding a household shutdown. Start savings now to prepare yourself to take care of your expenses should your pay stop. As a savings target, start saving toward the total amount of your must pay expenses for a month. Then save for 2 months of must pay expenses, then 3, and so on. It is best to have 3 to 6 months of must pay expenses in your emergency fund.
- Knock Down Debt. Your expenses are made up of the debt you have acquired. It is important to knock down as much debt as you can, as soon as you can to lower your expenses. After you create your emergency fund, your second goal is to knock down your debt, as quickly as possible. A few suggestions are to eliminate luxury expenses, reduce credit card balances, consolidate loans, negotiate with loan providers, etc… Your debt reduction plan starts with identifying your debt, then you prioritize your debt to see what can be paid off first, and finally get to work paying the debt off.
Go ahead and get started shutdown proofing your household NOW. Implement the three strategies above, before the need arises and it is too late. You never know when a shutdown could impact you.
Access 6 Ways to Help Prepare for a Household Shutdown HERE.