As the looming possibility of a government shutdown approaches, it's crucial to take proactive steps to safeguard your personal finances.
While you can't control the outcome of political decisions, you can control how prepared you are for the potential financial impacts.
Here are 15 practical measures you can take right now to protect your finances in the event of a government shutdown, which could happen as soon as September 30, 2023.
Resolve $10,000 or more of your debt
Credit card debt is suffocating. It constantly weighs on your mind and controls every choice you make. You can end up emotionally and even physically drained from it. And even though you make regular payments, it feels like you can never make any progress because of the interest.
National Debt Relief could help you resolve your credit card debt with an affordable plan that works for you. Just tell them your situation, then find out your debt relief options.
How to get National Debt Relief to help you resolve your debt: Sign up for a free debt assessment here. (Do not skip this step!) By signing up for a free assessment, National Debt Relief can assist you in settling your debt, but only if you schedule the assessment.
Review your budget
Before a government shutdown occurs, scrutinize your budget. Identify areas where you can reduce discretionary spending to create a financial safety net.
This is especially important if you're trying to move beyond living paycheck to paycheck. Your budget could really take a hit and not having a cushion might come back to bite you if you act too late.
By making the necessary adjustments now, you'll be better equipped to handle any income disruptions during a shutdown, ensuring your financial stability remains intact.
Build an emergency fund
Creating or bolstering your emergency fund is crucial. Aim to add money to your savings account so that you have at least three to six months' worth of living expenses.
This fund will act as a financial cushion, allowing you to cover essential bills and unforeseen expenses without tapping into other resources or going into debt.
Diversify your investments
Review your investment portfolio to ensure it's diversified across various asset classes, such as stocks, bonds, and real estate. Consider consulting a financial advisor to rebalance your portfolio if necessary.
Safe-haven assets like gold or Treasury bonds tend to perform well during economic uncertainty, helping safeguard your investments.
Don't let home repairs drain your bank account
Did you know if your air conditioner stops working, your homeowner’s insurance won’t cover it? Same with plumbing, electrical issues, appliances, and more. Not being able to make repairs could leave you in a bad situation — but a home warranty could protect you against surprise expenses.
Whether you’re a brand-new homeowner or you’ve owned your home for years, a plan from Choice Home Warranty could pick up the slack where homeowner’s insurance falls short.
If a covered system in your home breaks down, you can call their hotline 24/7 for assistance to get it repaired. They have a network of over 15,000 technicians that can assist you, making sure any issue can be taken care of swiftly — without breaking the bank.
Not sure if it’s for you? Rest easy: they were named one of the "Best Home Warranty Companies" by US News 360 Reviews and were awarded Best Company's 2020 Consumer's Choice Award. For a limited time, you can get your first month free when you sign up for a Single Payment home warranty plan.
Update your resume
While preparing your finances, it's wise to be proactive about your career. Ensure your resume is up-to-date with your latest accomplishments, skills, and qualifications.
In case of a government shutdown affecting your job, having an updated resume can expedite your job search.
Networking and exploring job opportunities in your field as a precaution can also provide peace of mind during uncertain times.
Explore gig work
Exploring gig work or freelancing opportunities can mitigate your financial risk in the event of a government shutdown. This can be a valuable safety net if your regular income is disrupted.
Additionally, gig work offers flexibility, allowing you to adapt your schedule to your needs, making it a practical option to supplement your income if necessary.
Pay down high-interest debt
Focusing on reducing high-interest debt is always wise. Credit card debt, for instance, can be a financial burden during uncertain times.
Allocate extra funds toward paying off these debts to decrease interest charges and free up more money for essentials if your income is affected.
By reducing your debt load, you'll have greater financial flexibility and less stress if a shutdown impacts your finances.
Stay updated on government developments and potential shutdowns by following reliable news sources.
Understand the specific agencies or programs that could be affected and how it might impact your life. This knowledge will help you make informed financial decisions and prepare for disruptions.
Check your insurance
Review your insurance coverage, including health, auto, and homeowners/renters policies. Ensure they are up-to-date and provide adequate coverage for your needs.
Consider additional coverage, especially for health insurance, as a government shutdown can impact healthcare services.
Understanding your insurance policies will give you peace of mind during uncertain times, reducing potential financial burdens in case of emergencies or disruptions.
Create a contingency plan
Develop a comprehensive plan outlining how you'll manage your finances, expenses, and essential needs during a government shutdown.
Identify potential sources of income, such as part-time work or freelance gigs, and prioritize your expenses to cover essentials like housing, utilities, and groceries.
A well-thought-out plan can help you navigate financial challenges with more confidence and stability if a shutdown occurs, reducing stress and uncertainty.
Reach out to your creditors, such as credit card companies, lenders, and utility providers, to discuss your situation and explore arrangements if a government shutdown affects your income.
Some creditors may offer temporary relief options or modified payment plans to help you manage financial stress during this period.
Open communication can prevent late fees, penalties, or damage to your credit score, providing valuable peace of mind.
Reduce non-essential expenses
Identify areas in your budget where you can cut back on non-essential spending. This might include dining out less, canceling unused subscriptions, or postponing discretionary purchases.
By tightening your financial belt, you'll conserve funds and create a financial cushion to navigate potential disruptions caused by a government shutdown.
Consider a Roth IRA
A Roth IRA can be a smart financial move during uncertain times. Contributions are made with after-tax dollars, and qualified withdrawals in retirement are tax-free.
This can provide a source of tax-free income if your financial situation becomes strained during a government shutdown.
Roth IRAs also offer flexibility in terms of contributions and withdrawals, making them a valuable addition to your financial strategy when planning for potential economic disruptions.
Monitor your credit
Regularly monitoring your credit can help you detect any unusual or unauthorized activity, protecting you from potential identity theft or financial fraud during uncertain times.
You're entitled to an annual free credit report from each major credit bureau. Use this to check your credit health and address any discrepancies promptly.
Create an emergency childcare plan
Childcare arrangements can be disrupted during a government shutdown due to furloughs or financial strain.
It’s important to identify trusted family members, friends, or local childcare providers who can assist if needed. Then, discuss your plan with them in advance so they're prepared.
Having this plan in place will relieve stress and allow you to focus on your finances without worrying about your children's care during a shutdown.
Seek financial advice
Government shutdowns can bring financial uncertainty. Consult a financial advisor to assess your situation, adjust investments, and create a tailored plan.
They can help you make informed decisions, protect your assets, and navigate potential economic turbulence.
Their expertise can help eliminate some money stress, ensuring you're financially prepared and can weather the storm if a shutdown occurs.
While a government shutdown can be a source of uncertainty, taking proactive steps to secure your finances can provide peace of mind.
By reviewing your budget, building an emergency fund, and diversifying your investments, you'll be better prepared to weather any financial storms that may arise.
Stay informed and adaptable, and focus on maintaining your financial stability. Preparing now can significantly impact your financial fitness should a shutdown occur.