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budget toolsHere we go again.  With Federal Employees not knowing when they will get their next paycheck due to the threatened government shutdown, it is time to talk budgeting. Learn the best way to budget for a short term crisis like the government shutdown. 

Federal employees and government contractors are loosing sleep worrying about the impact a government shutdown would have on their finances.

Two of the most stressful things in life are uncertainty and lack of control. A government shutdown and furlough hits federal workers with both of these stressors.

Handling bankruptcy cases in Southern Maryland, we see people dealing with this stress every day. We saw an increase in bankruptcy filings after the last government shutdown. The same thing could happen now if this drags on. 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 come up with a plan. An emergency budget to get you through a shutdown. Even if you don’t end up using this budget, having a plan will hopefully help you sleep better.

First, Keep in Touch with Your Creditors

Keep in touch with your creditors. If you do not have enough money to pay all your bills for the next 30 days, call your creditors and let them know. Make sure they understand that you are a federal employee and intend to pay your bill when you get back to work. They have a lot of debtors in the same situation, and they may back off collection efforts until the government shutdown is over. No matter what they tell you, it doesn’t hurt to try this tactic.

Figure Out Your Income & Finances

First you need to figure out your income and assess your finances. Take a look at what you have in your bank account. This is going to be your primary income until your next paycheck. If you are expecting a State tax refund, get your tax return filed as soon as possible to add to that number.

If there is a furlough, you may be able to apply for unemployment. This is especially important to consider if you are a government contractor. While government employees eventually received back pay when the last shutdown was over, many government contractors did not. This left many spending the next year trying to get caught up on bills. During the last shutdown Maryland encouraged Federal Workers to apply for unemployment benefits online.

Next look at the savings and lines of credit you can access to pay bills. Do not include your TSP or 401K in these calculations. You don’t want to access these funds unless there is no other alternative.  If you ever get to the point where you think you need to access these funds, come talk to us first. Tapping this money is rarely a good idea. If you can, come up with a plan that doesn’t involve incurring any debt on credit cards or lines of credit.

Develop Your Emergency Budget

After you determine your income, the next step is to figure out how to make this money last until your next paycheck. Look at your expenses and prioritize them. Remember, this is not a normal budget. This is an emergency budget to get you 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 you have automatic payments set up, you may need to suspend some of these to make your money last. If back pay is granted, you can use it to replenish your savings and get caught up on bills. To help federal employees and contractors deal with this, we are offering free consultations for federal employees and government contractors 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.

Prioritize Your Expenses

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 the bills.

Here is the order we came up with. Think about whether or not this order makes sense for you, or if you should shuffle the order of some of these items:

  1. Groceries
  2. Transportation (gas in your tank or public transportation)
  3. Rent
  4. Car Insurance
  5. Car payment
  6. Utilities
  7. Mortgage Payment
  8. Credit Cards

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.

Don’t forget gas money. For most people in Southern Maryland, you need to have gas 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.

Normally making your mortgage payment is your number one priority. However in this situation, this may not make sense. In Maryland, it takes over 4 months for your house to go to foreclosure. Due to the circumstances, it may make sense to put your mortgage payment further down the list than your utilities and car payment. If you are renting, eviction can happen a lot faster 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.


Nobody knows if a government shutdown will last a few days, a few weeks, or longer. Nobody knows if federal employees will be paid for the time they were off due to the shutdown. You should hope for the best, but prepare for the worst. Take action now, and make a plan that gets you through the next 30 days. Then keep your fingers crossed and hope this shutdown ends soon!

Want to know more? Discover what you need to know about bankruptcy in Maryland. Click here to see our Free Legal Consumer Guide to Maryland bankruptcy cases and get answers to your questions today. Know your options. Be informed. Protect yourself.

Need a bankruptcy lawyer? Please contact us for a consultation today if you need a Maryland bankruptcy lawyer for your bankruptcy case.

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