Financial & Estate Planning

Some employees cannot handle an unforeseen financial occurrence such as a 1,000-dollar medical bill or a 1,000-dollar auto repair bill. Image: Bob Korn/Shutterstock.com

Our parents always preached to us to save for a rainy day. For federal employees facing a federal shutdown it will rain hard for some and it may not let up.

The last federal shutdown lasted 35 days during the Trump Administration. I survived three other federal shutdowns lasting 5 or more days. Two shutdowns were during the Clinton administration and one was during the Obama administration.

You need to be prepared both financially and mentally. During a federal shutdown if you are a non-essential employee, you will be asked to stay home without pay. You cannot use annual leave or sick leave during the shutdown. Your health insurance will be paid during this period. Historically federal employees received backpay, but there is no guarantee that your agency will provide you with it.

Due to inflation, many federal employees are living from paycheck to paycheck. Some employees cannot handle an unforeseen financial occurrence such as a 1,000-dollar medical bill or a 1,000-dollar auto repair bill.

During several federal shutdowns, I received several payroll checks containing a payment amount of $0.00. This can be a shocking moment for anyone. A shutdown can be a very challenging time not knowing when you will return to work and when again you will receive your pay. But you need to stay strong and maintain an optimistic attitude through it all. Try and stay busy to alleviate your stress. Focus on exercise or perhaps cleaning out your closet or garage.

Hopefully, you have saved enough cash reserves to carry you through the shutdown. Unfortunately, you may need to set your mind into crisis mode. There are many simple ways as well as drastic measures that can build up a cash reserve. Here are some tips.

Simple measures include cutting back on discretionary purchases such as Starbucks, going out to eat, entertainment, clothing and so on. More drastic measures may include cutting back on services such as cable or streaming, you may want to cash in savings bonds, sell gold or silver jewelry, sell collectables or electronics on eBay, hold a garage sale, and of course you might tap your TSP for a loan. (A personal loan can be processed in few weeks and the fee is only 50 dollars. You pay back the loan at the rate of the G Fund.)


Abraham Grungold is a retired federal employee with 36 years of federal service, and through his company AG Financial Services he helps federal employees with their TSP and federal retirement planning and decisions. Mr. Grungold has written over 60 articles regarding the TSP and FERS retirement and been a guest on several podcasts with the Federal News Radio and the Government Executive Magazine.

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