The longest-ever (partial) shutdown of the U.S government impacted not only the 800,000 federal employees officially on furlough, but millions of ancillary workers whose livelihoods depend peripherally on those employees. Everyone from the contract workers at all levels who support federal agencies, to the restaurants and retailers and service providers in areas near those agencies across the country, felt the ripple effect. Those types of people who have lost income over the last several weeks will not receive retroactive pay and will struggle to recoup financially.
And whether there’ll be another shutdown in the near future remains to be seen. So Billshark would like to offer some tips on ways to help mitigate the loss of income, whether as a result of such government shutdowns or from any other situation in which you find yourself unwillingly unemployed.
- Move quickly
If you’ve been involuntarily unemployed, i.e., furloughed, laid off, downsized, etc., apply immediately for unemployment compensation. It will take approximately four weeks after you file before you begin receiving compensation. It will be a fraction of what you previously earned, but will at least keep you in groceries and gas. (You can’t receive unemployment insurance if you quit or are fired for cause.)
If you’re suddenly not receiving a regular paycheck, don’t keep your fingers crossed and hope you’ll be getting one soon. Contact every creditor immediately, explain the situation, and ask for relief. This includes credit cards, car loans, your mortgage lender, and student loan servicer, and be prepared to explain your situation in depth.
The official name of what you’re asking for is a “forbearance,” a process that allows you to temporarily stop making payments on any type of loan. If granted by a lender, a forbearance will not impact your credit score and can give you some breathing room. It may be best to make this request by phone so you can more easily explain your situation, but be sure to get the forbearance approval in writing.
Note: your landlord isn’t a lender, so this technique won’t apply, but don’t wait until you’ve missed a rent payment to contact him or her and explain what’s happening, and offer to make at least a partial rent payment, if you’re able to. Remember, your landlord has a mortgage payment to make on your property, and the advice promulgated during the shutdown of offering to do chores around the property in exchange for rent relief won’t help him do that.
- Prioritize needs
If you have an emergency fund available to help you meet your immediate needs, you’ll have to make it stretch as far as possible. Sit down and prioritize all your expenses. Food, utilities, and gasoline will probably top your list, along with rent, if you have enough left to spare. Then slash anything else you can. If you don’t have a contract, can you drop cable, satellite, or Internet service temporarily? How about newspaper subscriptions, Pilates classes, or haircuts? Can you skip Uber and take the bus or bum rides from friends? Be ruthless, and realize this situation is temporary until you can find another job.
- Think outside the box
No doubt you’ve already considered selling your stuff or picking up side gigs, but try to think of other sources of ready cash. Can you get a hardship loan from your 401K? Borrow against your whole life insurance policy (this doesn’t apply to term life policies)? Borrow against an annuity (fees and penalties will apply there)? Think hard about any assets you may have forgotten about. None of these are ideal because of the long-term repercussions in lost interest, repayments, etc., but an emergency sometimes requires drastic steps.
- Ask for help
While it can be uncomfortable to ask for help when you’re used to supporting yourself, now is not the time to let pride get in your way. You need to ask for help, whether from family and friends or local charitable organizations who are set up to assist those in need. If you’re still hesitating, remember how good you feel when you’re able to help someone else. Give others a chance to feel that way now.
Also, check with banks and credit unions (even if you’re not a member) to see if they’re offering short-term, low-cost loans. Also call “211” and ask to speak to a specialist, or check 211.org, which covers such topics as emergencies and disaster, food, health, jobs and employment, housing and utilities, and veterans’ assistance. It also offers a way to find 211-related services in your local area.
- Take care of yourself
You may think we’re stepping outside our field when we recommend taking care of your physical and mental health during periods of financial uncertainty, but doing so will pay off financially in the long run. If you’re not in good shape physically and mentally, you’ll not only sacrifice future earnings when you return to work, you may end up eventually paying more in medical bills. It also makes it more challenging to find—and interview for—another job.
A recent Harvard study found that a sudden loss of income resulted in severe negative health consequences. So it’s important during this time to avoid junk foods and substance abuse, get regular exercise, and use whatever relaxation techniques you’re comfortable with. That way, when you do get back to work, you’ll be ready to hit the ground running.
- Get active
Part of the result of being out of work is the accompanying feeling of helplessness. This is a good time to take some action to make your wider community better, whether volunteering at an animal shelter, learning a new skill, or becoming involved politically. If you can feel that you’re making a difference, you’ll feel empowered at least in one area of your life.
And if you haven’t done so already, submit your bills to Billshark so we can help you find extra cash. Remember, you pay nothing unless we save you money.