Would a Government Shutdown Affect Your Income? Here’s How to Prepare

Would a Government Shutdown Affect Your Income? Here’s How to Prepare
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When you are facing a sudden loss of income – whether it’s because of a potential government shutdown, loss of employment, or natural catastrophe – you may need to pivot quickly to keep your budget in line. Having a financial plan for such situations will put you in a better position to bounce back once your income has returned to normal levels.


Here are four tips to help you when you encounter a drop in income.


1. Understand Your Spending (and Triage Expenses)

You already should have a budget in place so you know where your income is going each month. If you don’t, the Consumer Financial Protection Bureau (CFPB) has an easy online version you can fill out, or consider MOAA’s Home Budget Analysis calculator for a deeper dive into your finances.


[RELATED: MOAA.org/Calculators]


When considering how to change that plan should you lose income, look at which expenses are essential -- food, shelter, and transportation should top the list. Continue to keep paying bills related to these needs while you rank the rest of your costs by importance.

2. Cut Back on Nonessential Spending

This goes beyond the morning specialty coffee and dining out at your favorite restaurant. Consider temporarily halting contributions to retirement and investment accounts, and stop making extra payments on debt. Always make the minimum payment, however, to avoid negative impacts to your credit score.

[FROM MOAA’S PRESIDENT: Pay ALL Servicemembers During a Federal Shutdown]

3. Know Where to Get Help

Relief societies like Army Emergency Assistance (AER), Navy-Marine Corps Relief Society, Air Force Aid Society, and Coast Guard Mutual Assistance often can provide interest-free loans or grants to servicemembers on active duty, activated members of the Guard and Reserve, retirees, and surviving spouses. Check eligibility requirements in advance to see whether you would qualify.

Other resources may also provide assistance, and every installation has a family readiness center with professionals who can provide financial counseling and information referrals.

[RELATED: The MOAA Foundation’s Crisis Relief Program | Donate to The MOAA Foundation]


4. Use Your Savings

As a financial counselor, I have seen clients ignore their “rainy-day fund” and go into credit card debt because they weren’t mentally ready to tap into their savings. Remember, a sudden loss of income is an emergency. Use your savings and then make replenishing them a priority when your income is back to normal.

Looking for more financial guidance on these or other topics? Visit MOAA.org/finance for the latest articles, member-exclusive benefits, upcoming webinars, and much more.


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About the Author

Lila Quintiliani, ChFC®, AFC®
Lila Quintiliani, ChFC®, AFC®

Quintiliani is MOAA's Program Director, Financial and Benefits Education/Counseling. She is a former Army Military Intelligence Officer as well as the spouse of an active-duty servicemember, and worked for over a decade at military installations as a personal financial counselor.