By John G. Merna
On March 21st the news was “The Government Avoids A Complete Shut Down As Congress Passes Last Minute Legislation”. It was the kind of headline I guess anyone should cheer about. But as your cheering for the government who spent us into this crisis, the commentator says “It only means federal employees will be furloughed for six months and lose up to 20% of their income”. That’s the good news?
This blog isn’t on the stupidity of our highly educated legislators and their inability to control spending, it is about how to survive their stupidity. Survive. Unfortunately, not thrive.
Southeast Virginia will be one of the worst hit areas in the country by the government furlough because of the high military presence in Norfolk, Virginia Beach, Portsmouth, Newport News, Hampton and the Richmond area. An income loss of 20% from 10’s of thousands of government employees means millions of dollars lost in the local economy. A loss of 10 to 20 percent of revenues due to the government furlough could have a huge effect for local businesses. Unlike Richmond, the Tidewater area, especially Virginia Beach has a huge influx of income from tourism during the summer which is a good part of the furlough period.
So you are one of the tens of thousands of military personnel, civilians, or contractors in Richmond and Hampton Roads directly affected by the government furlough. What do you do? Do you just throw your hands up and file bankruptcy? No.
Step One – Do an assessment.
Take the worst case scenario and calculate how much a 20% loss will be due to the government furlough.
Do your budget. List necessities as a priority and see how much income is left afterwards.
Cut discretionary spending, cancel or downsize the summer vacation plans.
Basically, see how big a bite this government furlough will take.
If you are like most people, living pay-check to paycheck with insufficient savings to whether this economic crisis, you’re going to be faced with figuring out where to come up with more money.
Step Two – Gather your financial resources.
Can you make a few extra bucks on the weekend building decks or knocking out a quilt?
Maybe it is time for that long overdue yard sale. Or maybe it is time to start that side business.
Remember, when doing these assessments that the total lost time has been estimated by the government to be 22 days of pay. That is a month’s pay (more or less) lost in six months. That will put a lot of people behind on even their basics.
Join me next time for Part Two of this blog on how to Survive The Government Furlough as I pose important questions you should be asking yourself at this time.