As much as we all like to think that military pay is a sure thing, there are situations that can affect it. And, as always, having a plan is the first step in dealing with whatever life throws at you. What should military families be doing to be better prepared for the next government shutdown?
Note: This is not a debate about whether there will be another government shutdown, or whether military pay can be affected. There will be another government shutdown someday. The federal government has shut down 18 times since the current budget process was created. The longest shutdown was from 16 December 1995 to 6 January 1996, and that occurred just a month after a five day shutdown. Military pay absolutely can be affected. It was delayed in the 1995-1996 shutdown, and of course there was the narrowly averted disaster in April 2011, where pay was disbursed in two different batches because the shutdown jeopardized the 15 April paycheck.
Understand the situation. If you don’t understand what just happened, or you can’t understand how military pay can be affected, take some time to learn how our federal government budget process works. This may not make the process less frustrating, but it will help you know what is going on. More importantly, it will prevent you from being one of the hundreds of people who told me, “I didn’t know this could happen,” or, “I would have not done x/y/z last week if I’d known a shutdown was coming.”
Take a hard look at your family’s finances. Do you have an emergency fund? How big is it? How many paychecks can you miss before you’re out of money? How much flexibility do you have in your family’s budget? How many bills need to be paid each month? Is your current financial situation comfortable or stressful. Don’t beat yourself up if things are tight, but recognize that you are in charge of your money and you have the power to improve your situation. Sometimes, admitting past mistakes is the first step to making changes.
Talk with your family. Working together as a team is the best way to get things done. Sit down with your spouse, and kids if they are the appropriate ages. Look at the ways that you’ve done well with money, and identify some areas for improvement. Creating a shared vision will help everyone get with the program.
Scrounge up some cash. Most of us have ways to create cash fast, but sometimes it is hard to think of what you could do. See 50 Way to Make $50 Fast for ideas to get started.
Go on alert. Look at this short-term situation as an opportunity to prepare yourself for what could happen in two weeks, and to jump-start your long-term solutions. Right now, start a serious spending freeze and sock that money into your savings account. Stop eating out, getting nails done, and pushing coins into the vending machine. Delay any expenses that can be delayed, including routine vehicle maintenance, household repairs, and any large purchases you’ve been planning. You don’t have to do this forever, but you probably want to do it until we get a final budget passed.
Plan your meals. Start with menus using up the things already in your freezer, refrigerator, and pantry. Figure out lower-cost alternatives to some of the more expensive meals you like. Learn how to shop cheaply. Websites like Living Rich With Coupons and The Krazy Coupon Lady can help you learn shop sales and use coupons. Use tools like Checkout 51 and Ibotta to get rebates on the groceries you’re already buying.
Trim your ongoing expenses. Call your cable company and ask how you can lower your bill. Comparison shop your cell phone service. Consider ways to decrease your gasoline spending, including planning trips, carpooling, and walking or biking when possible. Unplug your television, cable box, computer and cell phone chargers, and other electronics when not in use.
Pay off debt. Large monthly debt payments will strangle you in a financial emergency. Stop using your credit cards, and don’t take on any new loans. Make a plan to pay off your credit cards. If you have car payments, evaluate your options: can you truly afford the payment, is the car suitable for your financial situation, and might you be better off with another vehicle?
Increase your financial knowledge. Take some time to learn about personal finance. Your installation’s family service center offers classes and individual counseling on budgeting, military benefits, and other financial topics. Start reading/watching/listening to finance folks. Whether you like Doug Nordman, J.Money, Dave Ramsey, or Joe Saul-Sehy, pick a couple of financial educators and spend some time with their work. Heck, you might even read one of the 2,400-some articles I’ve written.
Identify resources in your community. Sometimes, just knowing what is available can help you feel more in control. Learn about your branch’s emergency relief society. Find out where the nearest food bank is located. Ask about help for electric bills or heating oil.
Add an income. Relying on a single income is hard. Consider whether your family can support another job, whether it is a 2nd job for the service member or a first or second job for a spouse. Maybe you can’t do it forever, but you can do it for a few months to build up a savings account or pay off debt.
Consider switching financial institutions. In times of crisis, military-friendly banks and credit unions are more flexible and offer more solutions for military members with impacted pay. USAA and Navy Federal Credit Union typically offers an interest-free loan for customers who meet eligibility requirements. Consider to switching to a financial institution, like USAA, who caters to the military community.
Obviously, none of us want to have a government shutdown, and no one wants military pay to be impacted. But it will happen. You can’t control these things, but you can control your preparation for the possibilities. Use this situation to inspire you to make changes so that a future shutdown and pay-scare isn’t a disaster for you and your family.
Related post: 10 Things To Do During A Government Shutdown