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Furloughed by the Shutdown? These 3 Steps Can Help You Manage Your Money
By Adam Hardy MONEY RESEARCH COLLECTIVE
Money asked financial planners to share advice for furloughed federal workers navigating the government shutdown.
As the government shutdown stretches into its third week, an estimated 750,000 furloughed federal workers are scrambling to make ends meet.
When the government shuts down, workers who are classified as “nonessential” are ordered to stay home without pay. When the government reopens, federal law states they are entitled to backpay, but bills are piling up now while their paychecks are in political limbo.
Shutdowns are “never fun or fair to the feds who serve,” says Wes Battle, a certified financial planner (CFP) at Financial Advantage Associates who specializes in working with federal employees.
Lawmakers — whose pay is not disrupted by the shutdown — remain gridlocked, and it’s not clear how long the shutdown will drag on. So Money asked financial planners for their biggest pieces of advice to furloughed federal workers navigating the third government shutdown in recent years.
Here’s what they recommend.
1. Prioritize your bills
Ideally, financial planners suggest building an emergency fund that can cover several months of expenses for situations exactly like this. But for federal workers who don’t have savings to lean on, the shutdown is especially difficult.
“When paychecks stop, the first rule is triage,” says Patrick Huey, a CFP and owner of Victory Independent Planning. “Prioritize the essentials.”
Huey encourages federal workers to focus on bills related to home and health: “Keep your roof, utilities, insurance and basic health needs at the top of the list,” he writes in an email to Money, “but cut everything nonessential.”
If it comes down to it, he says, you may want to consider deferring payments to bills that “aren’t tied to survival,” such as credit cards, student loans and streaming services.
“Any hits to your credit or cash can be repaired, but recovering from lost shelter or insurance is much harder,” Huey adds.
2. Avoid credit card debt (if possible)
With backpay on the horizon, it may be tempting for federal workers to put their normal expenses on a credit card during the shutdown. But financial advisors say to be wary of that strategy.
If you have a choice, Huey says to only pay for essentials using credit.
“Avoid racking up balances for things you don’t need right now,” he adds. “Try to limit charges so you won’t be overwhelmed by repayments.”
Battle says credit cards aren’t ideal. One alternative federal workers could tap is their Thrift Savings Plans, or TSPs.
Keep in mind, hardship withdrawals from TSPs may come with tax penalties and permanently reduce the retirement account balance. However, a TSP loan could be a smart option during a furlough, as it comes with low interest rates and no pre-pay penalty. Plus, the amount borrowed — plus the interest charged — goes back into the account once it’s repaid, Battle says.
“Nobody knows how long the shutdown will last or if the ones furloughed are even going to have a job when this is over,” adds Bill Shafransky, a senior wealth advisor at Moneco Advisors. “What you don’t want is a balance on a credit card that is compounding with interest and with no way to pay it back.”
Shafransky’s advice underscores the added uncertainty of this shutdown, as the Trump administration has attempted firing — not just furloughing — some federal workers. (A judge has issued a temporary halt to any reductions in force.) President Donald Trump has suggested some federal workers don’t deserve their backpay, despite law that guarantees their lost wages while the government is closed.
3. Communicate early and often
Huey recommends federal workers contact their major creditors to let them know about the furlough — especially landlords or mortgage lenders.
“Get ahead of the problem by proactively calling every biller and lender, even before you miss a payment,” he says, noting that this could open up short-term relief options like flexibility with payments.
Some lenders may even have benefits for federal workers that keep missed payments during a government shutdown from dinging your credit, he says.
PNC customers can request a freeze in credit reporting, for instance, and Lubbock National Bank says it will waive fees and not report missed payments on its mortgages. According to the American Bankers Association, about two dozen banks are offering similar assistance to furloughed federal workers.
Experts also recommend tapping community organizations for assistance. One option to quickly scan what’s available nearby is the My Fed Benefits tool, which aggregates known financial assistance programs for federal workers based on location. It shows discounts at local restaurants and entertainment options for furloughed federal workers.
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Adam Hardy is Money's lead data journalist. He writes news and feature stories aimed at helping everyday people manage their finances. He joined Money full-time in 2021 but has covered personal finance and economic topics since 2018. Previously, he worked for Forbes Advisor, The Penny Hoarder and Creative Loafing. In addition to those outlets, Adam’s work has been featured in a variety of local, national and international publications, including the Asia Times, Business Insider, Las Vegas Review-Journal, Yahoo! Finance, Nasdaq and several others. Adam graduated with a bachelor’s degree from the University of South Florida, where he studied magazine journalism and sociology. As a first-generation college graduate from a low-income, single-parent household, Adam understands firsthand the financial barriers that plague low-income Americans. His reporting aims to illuminate these issues. Since joining Money, Adam has already written over 300 articles, including a cover story on financial surveillance, a profile of Director Rohit Chopra of the Consumer Financial Protection Bureau and an investigation into flexible spending accounts, which found that workers forfeit billions of dollars annually through the workplace plans. He has also led data analysis on some of Money’s marquee rankings, including Best Places to Live, Best Places to Travel and Best Hospitals. He regularly contributes data reporting for Best Colleges, Best Banks and other lists as well. Adam also holds a multimedia storytelling certificate from Poynter’s News University and a data journalism certificate from the Investigative Reporters and Editors (IRE) at the University of Missouri. In 2017, he received an English teaching certification from the University of Cambridge, which he utilized during his time in Seoul, South Korea. There, he taught students of all ages, from 5 to 65, and worked with North Korean refugees who were resettling in the area. Now, Adam lives in Saint Petersburg, Florida, with his pup Bambi. He is a card-carrying shuffleboard club member.