With Federal Employees not knowing when they will get their next paycheck because of the government shutdown, it is time to talk budgeting. Two of the most stressful things in life are dealing with uncertainty and things beyond your control. Handling bankruptcy cases in Southern Maryland, we see people dealing with this every day. The shutdown furloughs hit federal workers with both of these.
To add insult to injury, many federal workers are still struggling to overcome this summer’s sequestration furloughs. This is the stuff that will wake you up at 3 am. To take back some control of this situation, we are asking our clients to apply for unemployment and make a budget. Maryland is encouraging Federal Workers to apply for unemployment benefits online.
Once you figure out your income the next step is to come up with a budget. This is not a normal budget. This is an emergency budget to get them through the furlough. This means guessing as to how long it will be until your next paycheck. If you have the savings, come up with a 60-day plan. If not, at least look at a 30-day plan. If back pay is granted, you can use it to replenish your savings and get caught up on bills. To help federal employees deal with this, we are offering free consultations for federal employees on how to handle their bills during the shutdown.
Not everyone’s plan will be the same. You need to do some research and figure out what is right for you. Some good places to start for information and ideas are the federal credit union websites. Try Navy FCU, Pentagon FCU, and USAA. One of the first things to do is to figure out what bills you have coming due in the next 30 to 60 days and what money you have to pay these bills. Now let’s figure out how to prioritize. First, make sure you have enough money for food. If this is all you have money for, everything else on the list will have to wait. For most people in Southern Maryland, you need to have money to get to work and to get to the store to buy groceries. If you can walk to the store, this may move further down the list. On WTOP this morning, one expert recommended making your utilities your lowest priority and your mortgage your first priority. In this situation, this may not make sense. In Maryland, it takes over 4 months for your house to go to foreclosure. To us, due to the circumstances, it may make sense to put your mortgage payment further down the list than your utilities. If you are renting, eviction can happen a lot quicker and it should be further up the list. For most people, cable and the internet would be way down the list. However, if you telecommute, you may want to move your internet service a little higher on the list. Here is the order we came up with. Think about if it makes sense for you, or if you would shift the order of some of these:
- Transportation (gas in your tank or public transportation)
- Car Insurance
- Car payment
- Mortgage Payment
- Credit Cards
If you do not have enough money to pay all your bills for the next 30 days, keep in touch with your creditors. Make sure they understand that you are a federal employee and intend to pay your bill when you get back to work.