Tesla came out with a big announcement the other week that they were laying off 7% of their workforce. We never really know when our company is going to do that reorganization, deliver some pink slips, or dust off a set of severance packages to get some people out early from the company. We can’t always predict when these things are going to happen, but we can certainly prepare by having a financial plan in place.
- Do you know how much you have in emergency reserves?
- How much monthly income would you need to survive if you didn’t have a paycheck for 3 months?
- What is saved up in all of your retirement plans?
- What are all of the benefits you have access to currently at work?
These are just a few of the questions you should be asking now in the event that something happens to your job and it’s no longer there to pay the bills. With the Government shutdown now at 30 days, there are some 800,000 workers who have been going without a paycheck for a month. While some of them should be able to get back pay, others are not likely to recoup the lost money from this shutdown. So, what are the money moves that Government workers can make during this difficult time?
1. Try to earn extra income – if you have the car just sitting there in your driveway or garage, maybe you should consider picking up some shifts with Uber or Lyft….or both. You can set your own hours, and this could give you enough spare cash to make it through this short-term pinch. AirBnB came up with “A Night on Us” and will give up to $110 extra to any federal worker who hosts an Airbnb Experience or has guests for three nights in their home between Dec. 18, 2018 and March 18, 2019. You can always go to websites such as www.taskrabbit.com or www.fiverr.com to use your skills to pick up some spare change as well.
2. Call Your Creditors – Creditors aren’t usually very friendly, but they have been exceptionally good to Government workers during this shutdown. It’s a good idea to get on your phone and reach out to your cable, phone, and credit card companies. Many of these companies will waive late charges and they may also give you an additional amount of time for a grace period to pay the bill. Remember, it is in their best interest to maintain you as a customer and doesn’t do them any good at all if they can’t collect any money. Your state may also offer other programs designed to help struggling or low-income families.
3. Look For A Low Interest Loan- The reality is that life moves on even when we aren’t making an income and the bills don’t generally stop coming into our household. The kids may need clothes or school items, and you may have things you need to fix in the house that are necessities. Most of the good high-quality banks and credit unions are playing real ball during this time. US Bank is offering loans with virtually no interest that range from $100 to $6,000 and each state has banks that are doing amazing things. Washington Federal, as an example, is offering a 90-day interest free loan.
4. Put The Freeze On Your Budget- If you have subscriptions to the gym or a streaming service, I wouldn’t cancel those subscriptions as you could be subject to early termination fees. You should call those companies and ask them if they would be willing to put a freeze on your subscriptions until you can get back up and going financially. It’s important that you cut out all short-term items in your budget that aren’t necessities. While the Shutdown could end tomorrow, it could also extend for a longer period of time. Also, consider looking at food banks or other pop up stores in your area that are designed to help Government employees during this time of need.
Most of these financial moves could be good ideas for anyone who is experiencing a layoff or a patch of time where you don’t have income coming into your household. Even though companies are doing well in this economy, remember that most large companies that are publicly traded still have to meet the insatiable appetite of Wall Street for growth and profit. Sometimes, that means companies need to reduce overhead and cut some of their employee workforce. The best that you can do is make sure your financial plan is tight so you can prepare for the one or two times this may happen to you in your career.
Ted Jenkin, CFP®, AAMS®, AWMA®, CRPC®, CMFC®, CRPS®
CEO and Founder oXYGen Financial, Inc.