What a Government Shutdown Means for Your Wallet

Published on: Dec 13, 2020fb-roundtwitter-roundemail-round

If you had “government shutdown” on your 2020 bingo card...congrats. Lawmakers now have until December 18 to avoid one, after passing a one-week funding bill on December 11. Reminder: a shutdown = when Congress can’t agree on legislation to (even temporarily) fund operations for the next fiscal year.

The deets that matter for your wallet: Shutting it down means closing nonessential gov offices – from ones that report economic stats to the agencies that process federally-backed mortgages. That puts a stop to a lot of important biz. (If you were wondering: yes, that could include some public health operations.)

Essential gov employees – like air traffic controllers and border protection workers – still do their jobs. But they may not get a paycheck until the shutdown ends. That can hurt their bank accounts...and maybe even the economy. Because when a portion of the workforce can’t afford to buy like normal, overall consumer spending (a big driver of economic growth) can drop.

What you can do about it: Get your finances in the best position possible to ride out a potential government shutdown. A few tips:

  • Save where you can. Extra cash in the bank can be a lifesaver when things get tough. Whether or not your job is likely to be affected by a shutdown, seeing hard times on the horizon is a good reminder to save what you can. Finding a few ways to spend less on your utility bills can be a good place to start.

  • Ask for help if you need it. If the shutdown affects your paycheck and you’re struggling to keep up with your debt payments, talk to your lenders. They may be willing to give you a break. Ask directly, be honest about what you can realistically afford, and negotiate as best you can.

  • Grocery-shop smarter. If parts of the US Department of Agriculture are OOO for a while, farmers may have a harder time getting the funds they need to plant more crops. That could lead to more expensive fruits and veggies for you down the line. Pro tip: save the scraps for carrots, celery, garlic, and other produce – and regrow your own.

  • Stay organized. A shutdown can delay home buying plans if employees who verify tax returns for the IRS or process loans for the Federal Housing Admin are sent home. If you’re ready to buy, keep all your docs in order while you wait (and double-down on tip #1 for extra credit). So you’re ready to close as soon as offices reopen.

Related: How to Make Your Grocery Runs Count

theSkimm: When Congress can’t figure out how the gov should spend its money, they shut down. Which creates more money problems. If a government shutdown is on the way, do what you can to prep your finances.

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Skimm'd by: Ivana Pino, Stacy Rapacon, and Elyse Steinhaus