The last couple of weeks, we wrote about how the vast majority of American workers live on a paycheck-to-paycheck basis. In fact, studies say about 80 percent of workers live based on their regular paychecks, and this doesn’t discriminate based on gender or salary. This specifically came to light over the course of January, when some 800,000 federal workers were going without pay amid the government partial shutdown.
Thankfully, the government is now back to being fully opened and everyone is getting paid again. But with the potential of another government shutdown possibly coming again in a few weeks – not to mention the threat of future shutdowns as Congress debates funding and budgets – we can all learn a thing or two based on the stories of struggling workers we heard over the past month.
With all of that said, here’s a look at some key financial lessons we can all learn from the shutdown, whether we were affected by it or not.
Tough times fell on many American workers in the past month with the partial shutdown, but they can fall on non-government workers too should layoffs, furloughs or job eliminations occur. That said, these lessons don’t just apply in the aftermath of the government shutdown, but can serve as a good reminder in any tough financial time for Americans:
- Everyone needs a rainy day fund: Minimally, you should have at least three solid months’ worth of expenses saved up in an emergency fund. We’re talking mortgage payments, car payments, utilities, the water bill, groceries – anything you spend in one month. Add up all of your expenditures for the past month and then multiply that by three, as this is the number you should strive to hit. These emergency funds can come in very handy in tough times, and it sure beats dipping into a designated account for such purposes than taking out personal loans or putting expenses on your credit card.
- Reassess your expenditures: We always recommend reassessing your monthly expenditures at least once a year, and now would certainly be a great time on the heels of a shutdown. Are you throwing money away on superfluous things? Too many times, people cut back on their expenditures only when their backs are up against the wall. Being more proactive about this can help you allocate money you’re saving elsewhere, like to the aforementioned emergency fund.
- Always be grinding: From a professional standpoint, you should always be learning new skills and staying innovative in your approach to how you do your job. If you don’t change and diversify, sooner or later you’re going to be left behind. So, don’t be afraid to try new things and continue to grow as a professional. This won’t just likely enable you to secure regular promotions at your current company, but it will help establish you as an essential piece of your company’s overall operations.
- Don’t put all of your eggs in one basket: We get how you may be maxed out professionally with your current 9-5 job, but don’t be afraid to tap into your other skill sets to keep other flows of revenue coming in. For instance, maybe you’re a great carpenter and can pick up side jobs doing construction work from time to time? Or perhaps you’re a natural when it comes to arts and crafts? Everyone has hobbies, our point is not to be afraid to tap into them for some additional income every now and then. In the event of an emergency, keeping your skills sharp in your area of expertise can help you navigate the uncertainty.
While we all yearn for job security, it’s important to remember that no one single job comes without its potential issues. Many government employees found that out the hard way earlier this year. You could also follow suit, based on the direction of your current company and if any difficult decisions need to be made from upper management. Make sure you’re in the best position possible to weather any difficult financial period by abiding by the lessons that we’ve shared above. You may just be thanking yourself for it later.
Regards,
Ethan Warrick
Editor
Wealth Authority
