Could you survive one month without income?

With the government shutdown pushing over a month long, some federal employees are having to juggle another missed paycheck. Yesterday during an interview with CNBC, US Commerce Secretary Ross is quoted stating:

“So the 30 days of pay that some people will be out – there’s no real reason why they shouldn’t be able to get a loan against it and we’ve seen a number of ads from the financial institutions doing that… there really is not a good excuse why there really should be a liquidity crisis,” he said. “True the people might have to pay a little bit of interest.”

Not very sympathetic, in my opinion. Why should they be burdened with even “a little bit of interest” on a loan…assuming they could get a decent loan without currently receiving income. Perhaps Mr. Ross could lend some of his billions to the federal workers in need of some cash to make ends meet.

The evening news is filled with stories of how the 30 days of no pay is forcing people to go to food banks and find ways to get cash together to avoid being late on their mortgage, rent and other monthly obligations. I feel for the federal employees and it also makes me think about how many Americans do not have an emergency savings account. If you’re a federal employee with potential of being a political pawn, then I think it would be very prudent to start an emergency savings account before the next government shutdown takes place.

Even if you’re not a federal employee, I think its so important to have an emergency savings account in the event something unexpected happens. You don’t want to be in a position where you are trying to borrow money when you are not receiving income and/or possibly falling behind on debts.  An “emergency” could happen at anytime, including something with your employment to health related issues.

If you don’t have an emergency fund, I recommend starting one as soon as possible. You can start by reviewing how much your monthly cost are.  How much do you pay for your monthly housing, transportation, phone/utilities, insurance, groceries…you know the drill! Some experts say that 6 months of your monthly expenses should be saved for an emergency… even if your goal is 3 months (and then shoot for 6 months), you’re off to a good start! You could even use the refund from your income taxes to start funding your emergency account or set a goal of how much you want need to save each month and stick to it.

Perhaps this IS a good time to also work on setting a budget if you’re already reviewing your monthly expenditures 😉  Are there places you can save by reducing interest rates on debts or cut back on spending. I’m trying to really watch what I spend on groceries and focus on not letting food go to waste by using our freezer more. It may take a little while to build up your emergency savings and hopefully you never need to use it. However, you’ll be glad it’s there should the unexpected happens.

PS: If you do find that you have high interest credit cards or debts you would like to consolidate, I’m happy to review your scenario to see if refinancing your home located in Washington state, makes sense. The savings from reducing what you pay on total monthly debts could also help fund your emergency fund.

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