Financial Preparedness

If anything should reinforce the need for financial preparedness, it is the ongoing government shutdown that has simultaneously not paid nearly a million government workers for a month and at the same time, made it impossible, per their work contract, to work elsewhere so they can earn money to pay their bills.  I can't even fathom being told to come to work but we won't pay you for a month or longer!

Even though this sort of forced-to-work-but-not-get-paid scenario may not happen to you personally, something similar like a major disaster or major recession or the sudden closure of the business you work at could have a similar impact on your finances so it behooves everyone to be financially prepared for such a situation.  This means...

• Get out of debt as quickly as possible.  Pay off the house, the car, the credit cards, and any other debt you have so that if there is a financial catastrophe, your only bills will be for utilities.
• Save up an emergency fund that will cover six months to a year of your monthly bills (which, you can imagine, will be easier to do if your monthly bills are utilities and food and gas and not a mountain of debt payments!).
• Stockpile a month or more worth of food.  Within days, people were already in line at food banks to get food to help them through the shutdown.  If you have a good amount of food at home (rotated through the food that you usually eat so it doesn't expire) you could go for days or weeks without going to the grocery store (also good for those times when you are ill or there is a massive storm and you can't get to the store).
• Do the occasional no spend week and see how that goes. Get used to not spending money every single day for coffee and lunch and other random purchases.
• Get in the habit of paying your bills ahead of time.  We pay our car insurance every six months, our HOA every six months instead of monthly, and our homeowners insurance annually.  With these bills paid ahead, we don't have to worry about them for months at a time.
• Also stockpile supplies you regularly use.  Toilet paper, soap, shampoo, etc. buy these things when they are on sale so that you will both save money on these necessary items and have plenty in storage in case you can't afford to buy them during a financial crisis.
• Know the rules.  Know the rules about taking money from your 401k during a financial crisis, know the requirements to keep your medical insurance in affect during a crisis, know if you can or can't accept other work during a shutdown event, etc.
• Have cash on hand.  In addition to an emergency fund, having actual cash stashed at home can cover small emergencies (like needing to fill up the gas tank before a storm).
• Consider creating multiple sources of income.  Doing side gigs or starting a small business out of a hobby can ensure that there is always a stream of income coming in.  Even if it doesn't match the income from your main job, it's something to help you pay the bills.
• Have an emergency plan.  If you suddenly find yourself without an income, consider taking some drastic steps to cut expenses (pulling kids out of daycare and watching the at home, shutting off cable TV, only driving a couple days a week to save gas, changing your cell phone plan to a cheaper plan, etc).