10 Minute Read
If you’ve been watching the news lately, you’ve probably noticed something called a partial government shutdown that’s happening right now. Don’t worry—we aren’t about to get political on you. We promise! But it’s a very real thing impacting 800,000 federal employees and hitting them where it really hurts—their paycheck.
Government shutdowns have far-reaching effects outside of just Washington, D.C. Across the country, federal workers aren’t getting paid, and yet some employees are still required to go to work.
It’s important to remember that everyone will receive back pay when the government reopens. But each day the shutdown goes on marks one more day that government workers aren’t getting a paycheck.
Truthfully, this is an issue that impacts everyone. A job loss can happen to anyone at anytime. And with 78% of Americans living paycheck to paycheck, it’s easy to see why the loss of even just one paycheck could be devastating.(1) It’s these kinds of things that make us so passionate about everyone having an emergency fund.
Did you miss a paycheck due to the partial government shutdown?
If you’re one of the many Americans who just missed their first paycheck, step back and take a deep breath. We know emotions are running high right now, and the future is unsure. But you don’t need to live in fear.
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Whatever you do right now, do not grab a credit card and do not take out a loan.
You don’t want to make a rash, knee-jerk decision based on anxiety and panic. When you’re facing the harsh reality of not getting paid for who knows how long, it’s easy to go into “freak out, do whatever we have to do to survive” mode. But don’t get suckered into letting a credit card or loan catch your fall.
And as scary as things look right now, loans and credit cards aren’t your safety net. They aren’t an emergency fund. They aren’t going to be your savior and solve all your problems.
Believe us, taking on new debt will only make things worse, not better. A bad financial decision in this season can have a lasting impact on your money and haunt you for years to come.
Instead, we’ll walk you through some practical, actionable steps you can take right now to live to fight another day—even without a paycheck.
7 Things to Do When You Miss a Paycheck or Lose Your Job
Create a budget. If you aren’t already living on a budget, the time is now! Making a monthly budget will show you exactly where your money is going—no ifs, ands or buts about it. Without a budget, you really can’t make every dollar stretch because you might not even know how much money you have to work with. Plus, your budget will show you places where you can cut back and save money (more on that later).
If you don’t have any income coming in right now, then make a budget based on the amount of money you do have. If you have $600 left to your name, budget out exactly where each of those dollars will go. It’s time to squeeze every last penny out of what you’ve got.
If you still have cash coming in from your spouse’s job or some other source, then adjust your budget to reflect that. Maybe the two of you usually bring in a combined $5,000 a month. But with the loss of one income, you’re down to $2,500 a month.
Adjust your budget to live off of that one income for the time being. It might feel tough to switch up your lifestyle, but you’ve got to make temporary sacrifices to get through this.
2. Take Care of the Four Walls
When the going gets rough—like it is right now—you need to focus on the things you really need to survive. We call these essentials the Four Walls. Forget the student loan payment, the vet bill and the cell phone bill (for now). The Four Walls are your priority, so pay for these things in this order before anything else:
These are the basics you need to keep going so you can live to fight another day. And it’s really hard to fight when your family doesn’t have food, isn’t it? So if there’s not food in the fridge, don’t pay the cable bill.
If there’s any money left over after you take care of the Four Walls, make a list of what else you need to pay and tackle in order of importance. When you run out of money—that’s it. Someone on the list isn’t getting paid, and that’s just how it goes. But it sure as heck isn’t going to be the checkout lady at the grocery store. Remember, that’s priority number one!
3. Stop Your Debt Snowball
When you’re just trying to make it to another day, you don’t need to be paying extra on your debt. Instead, focus on piling up cash as high as you can. This will help keep you afloat until you have income. Once life gets back to normal and everything is okay, you can pick up where you left off with your debt snowball.
If you’ve been chipping away at your debt, you probably don’t want to see all your progress come to a screeching halt. But the reality is, you’re in the middle of a crisis. So pause your debt snowball. If it’s within your budget to keep paying the minimum payments on your debt, go for it. But remember, the Four Walls come first. Don’t let your family go hungry for the sake of your FICO score.
4. Sell Stuff
Get radical. This is the time to sell whatever you can to bring in extra cash. Maybe that’s your jewelry, clothes, baby items, or even the extra car sitting in your garage. If you know you can part with something and get extra cash in your hands—do it! Well, within reason. Don’t go selling your organs on the black market or anything like that. But do get so intense about selling things that your pets and kids start wondering if they might be next.
5. Get a Temporary Job or Start a Side Hustle
If you’re out of a paycheck due to the shutdown, make sure your contract with your current employer allows you to take on a temporary job. Then start the part-time job search. Some great options for making extra money that might work for you are waiting tables, driving for Uber or Lyft, being a barista, working at a call center, or signing up to be a substitute teacher.
And even if one of those don’t work out, you can still take up odd jobs around your neighborhood (think cutting the grass, picking up leaves, babysitting or dog walking). If you want to start up a side hustle, focus on using your talents (you know, things you’re good at) to make extra money. You can use your design, sewing or baking skills to help bring in some money. Be on the lookout for opportunities that will add a few extra bucks to your pocket. In this situation, every little bit helps.
6. Look for Things to Cut
This isn’t the time to buy a case of Girl Scout cookies (delicious as they are), go see the latest movie, or visit your favorite restaurant. This is the time to cut back on any unnecessary expenses that you can. Tighten it up.
Suspend or pause the subscriptions you have (think Netflix, Hulu, meal delivery kits, specialty makeup boxes). They aren’t going anywhere, and you can easily pick them back up once everything blows over and you have disposable cash to spend again.
Don’t forget to call your cable, internet and cellular providers to see if there’s anything they’ll do to work with you during this time. Be open and honest and let them know your situation. You’ll never know if you don’t ask! And since you already have them on the line, go ahead and downgrade or suspend your service for now. None of these things fall into the Four Walls, remember?
We know making sacrifices like this can feel like adding insult to injury when you’re already hurting. But keep reminding yourself: This is not forever. You’re making temporary sacrifices to tread water until this storm passes and you’re back on your feet again.
7. Connect With Your Church or Local Community Groups
Let us be clear here: This shouldn’t be your first stop. Seeking help like this needs to happen after you’ve tried everything else. Make sure you take any temporary jobs you can get and work hard to get back up on your own two feet.
But, in times of real need, don’t be too prideful for a helping hand. Many churches and community groups within your area exist for situations like this. They want to help you! If going to a food bank means your family is fed, then do it.
This Is Why You Need an Emergency Fund
If you want to make sure this type of stress never finds you, the answer isn’t anything too crazy. It’s simple: You need an emergency fund. Rainy days will happen—it’s just a matter of when. An emergency fund is a buffer between you and life. And once you have it in place, you’ll breathe easy knowing it’s there!
“We were informed that our next paycheck will not arrive and our service will work without pay until a federal budget is approved. Thanks to your teaching, we have a proper emergency fund to cover an incident that military members don’t often face. While I have faith that we will be back paid, it is comforting to know that we can live for the next six months on savings without having to rely on payday loans or credit card terms that much of the 42,000 Coast Guard members are using to face this crisis.”
— Anonymous from Massachusetts
If you’re not getting paid right now and you didn't have an emergency fund to begin with, we're not here to beat you up about it. But once the clouds have cleared and you’re getting that paycheck again, you need to make getting out of debt and building an emergency fund a priority.
If you’re ready to get on track with your money, let us introduce you to the Baby Steps, Dave Ramsey’s proven plan for getting out of debt, saving money, and building wealth. Baby Step 1 is to save up $1,000 for your starter emergency fund—as quickly as you can. Once that’s taken care of, start on Baby Step 2 and get serious about paying off all of your debt (other than your mortgage). With debt out of the way forever, you can begin Baby Step 3 and build a full emergency fund that covers three to six months of your expenses.
Wouldn’t it feel great to know that no matter what happens, you’re going to be okay for three to six months? So build up that emergency fund, and you’ll be on the way toward creating security for you and your family.
The sad truth is, a lot of Americans haven’t been focusing on their savings. In fact, 34% of Americans have no savings at all, and 57% of Americans actually have less than $1,000 saved up.(2) Don’t let that be you. If having no savings nowadays is normal, be weird. Make a change! You can do it!
If you’ve been living paycheck to paycheck trying to make ends meet, give our budgeting app EveryDollar a try. We’ll show you how to get on a budget, track your expenses, and set goals for the future. The best part of all—it’s 100% free!