Are You “Non-Essential?” What It Means for Your Credit Future

Image: IAKOBCHUK VIACHESLAV
                                      Image: IAKOBCHUK VIACHESLAV

We covered the government shutdown a week ago, and unfortunately, the national deadlock continues. You “non-essential” and mandatory employees are undoubtedly nervous about the state of your finances. On October 7, CNBC reported a surge in Craigslist ads posted by furloughed workers in an attempt to sell their things for fast cash. Although the House has confirmed that employees will receive back-pay once the government reopens, a vague promise is unlikely to allay your current concerns. Monthly expenses coupled with no income are sure to put a strain on your budget. While we can hope the shutdown ends soon, keep the following questions in mind. Their answers will help you manage furlough-related hardships and avoid future damage.

I am considered non-essential and can’t make ends meet without an income. What should I do?

1. Face the problem. It may be tempting to hide, but avoiding your financial problems will only make things worse. Begin by assessing your budget and identifying:

  • Necessary expenses (e.g., rent, food, utilities) versus discretionary expenses (e.g., cable, internet, entertainment).
  • Areas to cut back. When times are tough, it’s important to save as much as possible. Consider suspending your cable and internet service, clipping coupons for food and generally tightening your spending habits.
  • Your creditors’ policies. Several businesses are coming forward as allies during the shutdown, offering furloughed workers discounts and extended payment plans. If you can’t make ends meet, call your creditors and ask them to help you weather the storm.

2. Look for deals. Now is not the time to pay full price. Although you’re likely to qualify for unemployment benefits during the furlough, processing could take weeks. Look for deals in the meantime for everything from food to gas. No savings are too small.

3. Sublimate. Reroute your worries into productivity. Apply for a temporary job to keep your finances safe and your mind engaged. We can’t predict how long the shutdown will last, and your stability demands action. Don’t wait.

My job requires me to work without pay during the shutdown. Is this legal?

If you are among the mandatory employees, you are faced with a tough situation. While furloughed workers can seek temporary employment, your job security requires you to stay onsite during the shutdown. There is no universal answer about the legality of this issue unless you are military personnel (who are required to remain on active duty). If you want out, proceed carefully by reviewing your employment contract or speaking with a labor lawyer about your options. A word of caution: Don’t leave your current position without another firm offer. Searching for a new job is bound to outlast the temporary shutdown.

The shutdown has taken its toll on my finances. Is there any way to avoid this issue in the future?

Unless you plan to run for public office, don’t expect to have a direct impact on the state of the government. Job security is a valuable commodity, one you should pursue if the opportunity arises. When deciding to continue your job or look elsewhere, keep the following questions in mind, regardless of government affiliation:

1. Can I rely on my employer? How often does your job disappoint you? Are you faced with unrealistic expectations or unreliable payday policies? Have these issues impacted your ability to pay the bills? The furlough may be an isolated incident, but it’s important to consider these questions when determining the longevity of any position. If you aren’t getting a fair deal, it’s time to move on.

2. Is there room for advancement? How high is your corporate ladder? Are you satisfied with your career’s progression or are you being overlooked? Ambition may seem frivolous at a time like this, but a job that undervalues you also prevents you from acquiring the skills necessary to improve. When it comes to your career, don’t underestimate the power of advancement. Find a boss who believes in your potential.

3. Can I afford to save? You probably understand the importance of emergency savings by now. A well-funded bank account is exactly what you need to avoid the stress of late bills and credit score damage. If your current savings are low, ask yourself why. Are you bad with money, or has your salary limited your ability to plan for the future? It’s important to find a position that does more than pay the bills. When the dust settles, talk to your boss about a pay raise or look for other opportunities. When circumstances conspire, preparation is imperative.