It’s October 1, 2013, and the government shutdown has officially begun. Oh, the mail will still get delivered and social security recipients will still receive their checks, but it’s a very sad day for all who have been affected by furloughs or closures of some kind. I am praying for you, your families, and for our government officials. May they somehow find the wisdom and humility to be able to do the right thing by the American people, put their egos aside, and perhaps even compromise a little. In this political climate that has so deeply divided our country lately, that prayer sounds far-fetched, I know, but my hope is that we all come out of this with lessons learned, especially within our own families.
Are you and your family financially ready for this shutdown? If so, congratulations! You’ve done a much better job with your own budget than our congressmen have! But if the panic is starting to set in for you, here are five steps you can take right now to get you through the present situation and be more prepared for the future, with as little pain as possible, and hopefully not too many sleepless nights.
Step 1) Take inventory.
You’ll definitely need to get your financial house in order, if it’s not already. How much do you have coming in THIS WEEK and NEXT? If you are married, this includes your spouse (and you should be sitting down doing this together). Do you have an emergency fund? How much will you allot to bridge the gap? Write the number down.
Step 2) Assess needs vs. wants.
What do you NEED to be spend money on THIS WEEK and NEXT? Can you put off that 50% off sale at the Banana Republic Outlet? I think you’ll survive. Can you put off date night and stay home with some DVDs and popcorn instead? Write down the ESSENTIALS ONLY, in order, from most essential to least. Your priority list should look something like the this: house payment, food, electricity, gas, phone, etc. (with “new shoes” being somewhere close to the bottom).
Step 3) Have a family meeting.
Realize that nothing is off the table. ALL expenditures are up for discussion. This is where you’ll be very UNLIKE congress, and you’ll have to make some decisions to potentially cut some things you have gotten comfortable with. Will you freeze your wireless account? Turn off the cable? Pass on a football tailgate party? Make home lunches? Know that this is temporary, and all of these changes can be reversed.
Step 4) Do the math.
It’s time to make a budget (yes, I said it). If you already have one, that was for your OLD income. You need to set that one aside and live in the here and now, so let’s walk you through the process.
- Take a sheet of paper, excel spreadsheet, poster board, whatever. At the top, write down all the dollars coming IN for the week/two weeks (or month) and then one by one, list the dollars going OUT.
- Subtract IN minus OUT, adjusting (and readjusting) your expense categories UNTIL THE DIFFERENCE EQUALS ZERO. If you get a number less than zero, either cut something from the bottom of your priority list, or reassess the dollar amounts you assigned to each item and see if you can lower any of them for the time being.
- If you get a number that is greater than zero, good for you! You can allocate that extra money to an emergency fund if you don’t already have one, or to a debt you need to pay off. I know, you still want to go to that Banana Republic sale, but trust me, you’ll be so happy later on when you have no debt hanging over you, and you have some extra money in the bank for a rainy day.
Step 5) Use Cash (“shutdown” the plastic).
Try to avoid paying with plastic. It’s just a little harder to part with the dollar bills in your wallet than it is to swipe a card through a machine. Granted, cash may not feel as sexy as your American Express Platinum card, but if you must use plastic, using a debit, rather than a credit card will help you avoid over-spending. Side bonus: Your purchase won’t follow you home and show up in your mailbox next month.
Whether or not you are directly affected by the government shutdown, these five steps can help you keep your family afloat during good times AND bad. Following these steps with consistency, each time money comes in, will help you not only take care of your immediate needs, but it can help you keep your eye on your goal with precision. Each time you go through the process you will get better and better at streamlining the balance between what comes in and what goes out. You will be on your way to becoming more in control of your money instead of your money controlling you. After all, who wants to be a slave to their money? Not me!
With 76% of Americans living paycheck to paycheck, it’s a scary thought to be furloughed, laid off, or worse. That said, being financially responsible isn’t rocket science. It’s called living on less than you make. It’s called math. It’s hard. It’s really uncomfortable, and your friends will probably laugh at you, but yes, it can be done.
The sooner you get your financial house in order (furlough or no furlough), the sooner you will feel a sense of control during all this crazy stuff happening around us. And having that sense of control, and on your way to being debt free, is a wonderful way to help us all sleep better at night.