Hey, federal employees: How many of you were you watching the Countdown to Shutdown clock and wondering how you’d cope if salaries were delayed by even a few days?<\/p>\n
The time to figure out how you would have managed was before<\/i> the crisis loomed.<\/b> The same goes for any non-government workers living paycheck to paycheck. What if something happened to delay or (heaven forbid) curtail those checks?<\/p>\n
You can’t predict illness, layoff or your employer going out of business. But you can prepare for these contingencies with a financial fire drill, i.e.<\/i>, getting a clear idea of baseline expenses and creating a plan to cover them with available funds.<\/p>\n
Initially, the idea is about as pleasant as a colonoscopy: You know you should<\/i>, but you’re a little afraid of what you’ll find out. What if we can’t make it on one salary? What if we’re doomed?<\/i> Actually, knowing what your survival budget looks like is incredibly reassuring. It’s a playbook for tough times: If worst comes to worst, we could manage on as little as $X.<\/i><\/p>\n
A friend once told me if layoffs came she’d probably be in shock. Having a plan in writing means she could shift into survival mode rather than spin her wheels. You should be prepared, too. Do this now<\/i><\/b>, before one of those contingencies lands on you like a ton of unemployment paperwork.<\/p>\n A financial fire drill is not the same as tracking your spending<\/a>. This time you’ll be tracking how much you can avoid<\/i> spending on food, shelter, utilities and debt service (e.g.<\/i>, student loan or mortgage). The idea is to meet these basic needs in a basic way.<\/p>\n \u201cBasic\u201d means exactly that. Prepare to be temporarily ruthless. Consider these cost-cutting strategies\/resources as a starting point:<\/p>\n Add up the bare-minimum costs. Now you know what you need each month. (Hint: Not want. Need.<\/i>)<\/p>\n Should this budget ever be implemented, it’ll be a shock. You and your spouse\/partner (if any) may hanker after the good old days of lunches out and mani-pedis, while offspring (if any) moan about the lack of Pokemon cards or ballet lessons.<\/p>\n You’ll all live.<\/p>\n Now that you know the size of your bare-bones budget, it’s time to figure out how to cover it. If you got laid off and were eligible for unemployment \u2014 remember, not everyone is \u2014 you might be startled by the amount you’ll be given:<\/p>\n That’s a huge blow to your budget even if you have a spouse\/partner who’s employed. How long would you be able to pay the rent and keep the lights on?<\/p>\n This is why building an emergency fund<\/a> is so important. It may not be easy. Maybe your salary isn’t keeping up with inflation (whose is?) and your family’s needs are growing. Maybe you think there’s nowhere left to cut. Maybe there really isn’t.<\/p>\n But be honest: Is there really<\/i> nowhere left to cut, or are you simply unwilling to do the hard work of temporary self-sacrifice?<\/p>\n As a Bulgarian PF blogger named Rya wrote in a recent article here<\/a>, \u201ctough or not, you have to do it.\u201d Sometimes life requires a little discipline and, yeah, doing without. In other words, short-term sacrifice for long-term security. Welcome to adulthood. It isn’t always fun.<\/p>\n My GRS post on the subject \u2014 \u201cThink you can’t afford an emergency fund? Think again!<\/a>\u201d \u2014 offers tips for squeezing a few dollars here and there. Keep at it. The fund will grow. You may not even need to use it if you’ve got a partner with a salary and also one or more…<\/p>\n<\/span>What Do You Need to Get By?<\/span><\/h2>\n
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<\/span>What Available Funds?<\/span><\/h2>\n
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<\/span>Alternative Income Streams<\/span><\/h2>\n