With no immediate end in sight for the partial government shutdown, more than 800,000 federal workers nationwide are without their first paycheck as of last Friday. This is the first payroll distribution affected by the shutdown.
The Federal Reserve Board has reported that nearly four in 10 Americans are unable to cover a $400 unexpected expense – which means that some of the furloughed federal employees have likely exhausted all of their cash reserves to stay afloat.
Because impacted workers may be waiting for retroactive pay for an extended period, there will be a long road to financial recovery for some.
For workers impacted by the government shutdown, here are tips from LSS Financial Counseling, a nonprofit service in Minnesota that provides budget counseling, credit card debt management, student loan counseling, foreclosure prevention, and homeownership education:
Contact creditors:
It’s a good idea to call your lenders/creditors, including student loan servicers, to let them know what’s going on and that you intend to pay as soon as you are able. And once your financial situation improves, start paying them back as quickly as possible. You can also check into financial counseling to determine your best repayment options with those unsecured debts (personal loans, unsecured lines of credit, credit cards, old medical bills, etc.).
Switch to an emergency budget:
Housing expenses need to come first. Prioritize your mortgage or rent payment, homeowner’s insurance, association fees, and property taxes. . Utilities: Pay heat, gas, electric, and water bills to prevent shut-off. For unnecessary services such as a landline telephone, cable/satellite television, Internet, etc.call to see if you can temporarily suspend them. Or, if you determine you can go without them to save money indefinitely, then cancel them. . Food: Stick to the basics when buying groceries. Look for cheaper meals where you can have lots of leftovers, such as chili, soups, and meatloaf. If you buy organic, you may temporarily need to buy non-organic items to save money . Insurance: Even though some may think this is the first place to cut spending, as it may not seem like they’re necessities, medical insurance and automobile liability insurance premiums are essential. . Secured debts: Be sure to keep up on secured loan payments, such as car loans to avoid repossession. However, you can always ask your lender if you can pay interest only or get a forbearance, which means they will allow you to miss a payment or a few temporarily and add them to the end of the loan. Only agree to what you can afford.
Minnesota Resources to
help bridge financial gaps:
. Unemployment
Insurance (UI):
www.uimn.org or call
(651) 296.3644 or (877) 898.9090
Apply for UI as soon as you are
unemployed or when your hours are
significantly reduced.
. Home Ownership Center
www.hocmn.org
(651) 659.9336 or (866) 462.6466
Locate your local mortgage foreclosure
prevention/housing counseling
provider.
. HOME Line
www.homelinemn.org
(612) 728.5767 or (866) 866.3546
Obtain free legal, organizing, education,
and advocacy services for tenants.
. Fare For All:
www.fareforall.org
(800) 582.4291
The cooperative food-purchasing
program is open to everyone. There are
no income restrictions.
. Health Center Locator
www.findahealthcenter.hrsa.gov
(877) 313.1823
Locate free or low-cost health
centers including maps and contact
information with this online tool.
. Food banks
Locally, Ruby’s Pantry is offering gift certificates to government workers affected by the shutdown and Second Harvest Northern Lakes Food Bank announced this week, “Second Harvest Northern Lakes Food Bank and our national network of food banks stands at the ready in any crisis and this shutdown is no different,” said Shaye Moris of the Second Harvest Northern Lakes Food Bank.
“We are very concerned about what happens to our neighbors if the shutdown persists past February. We are already receiving inquiries from affected federal employees. If programs like SNAP and WIC cannot be funded demand could exceed our capacity in the long run,” said Moris.
To locate services available in our region, people are asked to visit: northernlakesfoodbank.org/findfood or by calling (888) 727-5653.
For more information contact Shaye Moris, executive director, (218) 336-2300 or shaye@northernlakesfoodbank.org.
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