Possible government shutdown: Four steps to manage loss of income

HOUSTON - The sudden loss of a paycheck. That's what 123,000 federal workers and 114,000 active duty service members in Texas could face if the government shuts down.

Personal finance experts say we should always have three to six months of living expenses in an emergency fund.  But Bankrate found 52% of Americans don't.

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If you're in the boat, Amy Lins with the non-profit credit counseling agency Money Management International says there are four steps to manage a sudden loss of income. So take a deep breath.

First, calculate your essential needs.

"Make sure your mortgage or your rent is a priority. So prioritize those safety needs, including housing, food, shelter transportation," said Lin.

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Second, call your creditors.  If you have credit card debt, loans, or student loan payments that just resumed, ask your creditors about pausing or reducing monthly payments until your income is flowing again.

"The last time we had a government shutdown, there were a lot of creditors that offered forbearance, skipping payments, and things like that," said Lins.

Third, cut expenses you don't absolutely need.

"If you have a gym membership or streaming service, you can put them on pause. You don’t have to cancel them," explained Lins.

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And fourth, look for ways to add income.

"Generate some short-term gig or maybe look for items you don’t need in the house anymore that you could sell," Lins suggested.  You can use local selling platforms like Facebook Marketplace or Craigslist.

Furloughed federal workers are eligible for unemployment benefits.

"If they do get paid retroactively for that time period, they may have to pay back those benefits. But still for the time period, that bridges that gap," said Lins.

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And they can receive SNAP, the Supplemental Food Assistance Program, if they meet the eligibility criteria. SNAP officials say funding is available for the month of October, but federal staff shortages and a stalled Farm Bill could later delay benefits from being loaded onto cards.

Furloughed federal workers will maintain their healthcare coverage under the Federal Employees Health Benefits Program during a possible shutdown. Premiums accrue during that time and will be taken out of employees' first paycheck when the government reopens.

When faced with a sudden loss of income, making a plan can help alleviate stress.  You can also reach out for help managing financially from non-profit credit counseling agencies like MMI.