How to Deal With the Government Shutdown and Its Effects on Your Finances

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We received a question on SaveUp’s Facebook page that I wanted to address in a timely manner: “Special coverage on the shutdown? I’m one of many government employees using savings and accruing debt while we’re not getting paid.”

There is no easy answer on how to handle this situation, particularly when one is in the thick of things and not receiving a paycheck. Additionally, there is still uncertainty with our economy regarding how Congress will handle the debt ceiling. As I’m writing this on Wednesday, I’m hopeful the government shutdown will be behind us by the time this is posted on Thursday. However, there will still be an impact on the personal finances of those who haven’t been paid for the duration of the shutdown. My approach is to consider aspects of this situation that we can control. After all, so much of this situation is out of our control. Here are some ideas…

Spending Inventory

Cut back where you can. Take an inventory of spending and reduce discretionary spending. You can keep track on a spreadsheet or monitor your debit and credit card spending on SaveUp. Or you can go the “old fashioned” route and keep a little note pad with you and write down all your expenses.


Explain your situation to those you owe money. Let them know you intend to pay them, but because of the government shutdown you’re having difficulty. Ask them to work with you so that you can pay them an amount you can afford once you receive a paycheck again. Depending on the solution that Congress decides upon, you might receive pay retroactively.

Preserve Retirement Accounts

As a general rule of thumb, don’t take money out of retirement accounts. Depending on your circumstances, the interest you’d pay on a credit card could be less than the penalty. Plus it is difficult to get money back into those accounts. There are other reasons, beyond the scope of this post, to preserve your retirement accounts.

Use Free Time Effectively

If you’re furloughed (unfortunately, some people are required to work without pay), take time to improve your position. Polish your resume, look for part time work or develop a hobby that might have the potential for income. I’ve also seen clients get friends together and hold garage sales to make a little extra money and take advantage of free time.

Debt Repayment Plan

Develop a plan to pay back debt once you’re back to work. You might consider a zero percent credit card as part of that plan. Nerdwallet has a great search tool.

Preventative Measures

Put preventative measures in place, such as an emergency fund. Unfortunately, even if Congress comes to an agreement, it doesn’t mean we won’t be faced with another shutdown in January or March. Having an emergency fund is a good practice for all of us (not just “non essential” government employees).

I hope these ideas are helpful and that you control the controllables during this difficult time in order to mitigate financial hardship and ultimately SaveUp!

This post was written by SaveUp’s personal finance contributing writer, Catherine Hawley, CFP®.

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Written by Catherine Hawley

Catherine is a CERTIFIED FINANCIAL PLANNER (TM) who offers accessible and objective financial advice to individuals and families. Her aim is to help clients gain clarity and confidence so they can pursue their definition of financial success. You can find more information about her independent practice at She has worked at Rhodes & Fletcher, LLC as a Personal Benefits Specialist and at the firms of Bernstein Global Wealth Management and Barclayʼs Global Investors. Catherine has a bachelors degree in communication studies from the University of California, Los Angeles where she was a scholarship athlete and captain of the womenʼs tennis team.