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Gov shutdown a great example of why everyone needs an emergency fund.

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    Gov shutdown a great example of why everyone needs an emergency fund.

    I've been scanning the headlines and thinking about everyone in DC who is impacted the shutdown. Today is something like day 17, and affected employees have probably missed at least one paycheck. I've also been seeing news about some credit unions offering loans or extended terms to help those affected. However, loans are just that loans - they aren't free money. Instead, these kinds of unexpected events are the exact reason why people should have an emergency fund of at least a few months expenses. Crazy or unexpected things can happen, and if you've got cash in the bank, events like the shutdown aren't an emergency, just an inconvenient pain.
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    #2
    Originally posted by james.hendrickson View Post
    I've been scanning the headlines and thinking about everyone in DC who is impacted the shutdown.
    The effect of the shutdown spans the nation. It isn't just a DC thing. There are over 800,000 employees impacted. I live in New Jersey and when seeing patients, I routinely ask if they need a work note. I've already had a couple tell me they didn't because they were out of work due to the shutdown.

    I'll refrain from making this political even though it clearly is. I hope others will do the same so that the thread doesn't need to be closed. Let's just focus on the financial aspect. James is certainly correct that this is a great example of why everyone needs an EF. Even if you have a super stable job with the Federal government, you're still not immune from income interruption due to forces beyond your control. Everybody will get back pay once things are up and running again, but you need to be able to pay your bills in the meantime.
    Steve

    * Despite the high cost of living, it remains very popular.
    * Why should I pay for my daughter's education when she already knows everything?
    * There are no shortcuts to anywhere worth going.

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      #3
      Originally posted by james.hendrickson View Post
      I've been scanning the headlines and thinking about everyone in DC who is impacted the shutdown.
      As Steve said, this is NOT a DC thing. The Federal Government operates in all 50 states and territories.

      This is affecting the coast guard employees in our area, they are part of Homeland Security. I think lawmakers did make some provisions at this point for them. But yes, the wives were complaining about not getting a paycheck. This is exactly where an emergency fund is needed.
      My other blog is Your Organized Friend.

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        #4
        Originally posted by james.hendrickson View Post
        Crazy or unexpected things can happen, and if you've got cash in the bank, events like the shutdown aren't an emergency, just an inconvenient pain.
        My father is a meteorologist for NOAA in Miami, and is one of those who are working without pay. The shutdown started right before my family all meet up in OKC for the holidays, and his attitude was exactly as you described -- it's annoying, but with plenty of money in savings, my dad's not really worried about it. They'll back-pay him, and life will go on.

        I've had the same thing happen a couple times when the DoD budget was the victim of the political squabbles, and it was the same deal... Bothersome, but manageable with my savings in place. But for the folks who didn't have anything saved, it was a crisis. Not very helpful when you're in a combat zone & your people are having panic attacks about their families back home not having any money to pay rent or keep the lights on. Makes me grateful for being prepared.
        "Praestantia per minutus" ... "Acta non verba"

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          #5
          Very unfortunate situation and it is certainly a reminder of the importance of having a sufficient amount of cash on hand. On the other hand, It's worse for sub-contractors that work along side the federal workers. They will not receive back pay. It can cause a divide in mission critical positions because leaders have to choose who will work and who will go home during the shutdown.

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            #6
            I had no idea so many people were working without pay.
            LivingAlmostLarge Blog

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              #7
              Originally posted by LivingAlmostLarge View Post
              I had no idea so many people were working without pay.
              In all cases, they will be paid for their work, just not until the shutdown ends, OR there is some change that authorizes pay. Coast guard I believe has had this corrected since the shutdown. People really do take for granted how big the Federal government is in size.
              My other blog is Your Organized Friend.

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                #8
                potential for government shutdown is a part of being a federal employee. All of them know that, so if they're caught unprepared when this shutdown hit (As it did many times in the past), then they're fools.

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                  #9
                  Originally posted by ~bs View Post
                  potential for government shutdown is a part of being a federal employee. All of them know that, so if they're caught unprepared when this shutdown hit (As it did many times in the past), then they're fools.
                  I tend to agree, yet, they are Americans also...many of whom do not plan or manage finances well.
                  My other blog is Your Organized Friend.

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                    #10
                    ^ And it's not that I'm speaking from lack of experience. My parents and brother were/are federal employees. If the sky is falling every time one of these happens, you're not handling your work/life balance correctly.

                    The federal government undergoes periodic RIFs (reductions in force) as well.

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                      #11
                      Originally posted by ~bs View Post
                      If the sky is falling every time one of these happens, you're not handling your work/life balance correctly.
                      Certainly, but we frequently see the stats: 70% of Americans live paycheck to paycheck. Most people can not come up with $400 for an unexpected bill without borrowing money. Everybody knows stuff happens. Everybody knows they should have savings. But the reality is that the vast majority of people do not.

                      I did speak to a patient today who is furloughed. He said that people who are still working without pay are guaranteed back pay since they are working. People like himself who are not working don't have that guarantee. Congress needs to approve the back pay for them. That will most likely happen but it's not assured. So I suppose working without pay is the better position to be in.
                      Steve

                      * Despite the high cost of living, it remains very popular.
                      * Why should I pay for my daughter's education when she already knows everything?
                      * There are no shortcuts to anywhere worth going.

                      Comment


                        #12
                        ^
                        It is.

                        -The best position is if your position is "essential" with alternative funding sources. Those people are working without interruption in pay. My brother currently works in such a postion, my parents did not.
                        -Second is "essential" working with pay delayed until bill passed. You WILL get paid for your work, its just a timing issue
                        - Most uncertain position is not working without pay. Congress could (and usually does I believe) have to approve their back pay.

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                          #13
                          I went through a few government shutdowns over my 20 years in the military. As an active duty guy, I was always essential and paid. But as many of you know, we were in debt up to our eyeballs and we would have been in serious trouble if we didn't get paid.

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                            #14
                            government before shutdown = does nothing

                            government after shutdown = does nothing
                            Gunga galunga...gunga -- gunga galunga.

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                              #15
                              The only ones who're guaranteed to get back pay are those who are "essential" and working without pay. "Furloughed" employees are not guaranteed back pay without an act of Congress.

                              Government contractors will not get back pay because they are not federal employees.

                              This shutdown has revealed that

                              (​​​​​​1) Everyone needs at least 6 months' living expenses as "emergency fund" and

                              (2) Work for a government contractor at your own risk !

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