The federal government shutdown on October 1 triggered significant financial challenges for many workers. Approximately 900,000 federal employees are furloughed, while 700,000 others deemed essential are working without pay. Adding to the strain, there’s uncertainty about whether these workers will receive legally mandated back pay once the shutdown ends. For federal employees, taking on another job during a furlough often requires agency approval, and for those working without pay, this isn’t even an option. This situation could spell financial disaster for many.
Though only 1.8% of U.S. workers are employed by the federal government, income disruptions can affect anyone—whether through furloughs, layoffs, or other unexpected losses. Here are key strategies to help you navigate and overcome income loss:
Establish Your Bare Minimum Budget
If you’re facing income loss, calculate your essential monthly expenses to understand your baseline needs. These include critical costs like rent or mortgage, utilities, groceries, transportation, and childcare.
To determine this number:
- List fixed expenses: Include consistent costs like rent or childcare.
- Estimate variable expenses: Average out costs like groceries and utilities based on the past 6–12 months.
This bare minimum budget provides a clear framework for managing your finances sustainably during income disruption.
Reach Out to Creditors
If you have credit card debt, student loans, or other financial obligations, contact your creditors promptly. Ask about options to pause payments or reduce monthly requirements temporarily.
While this may increase your debt over time, it can lower your immediate financial burden, reducing your bare minimum budget and providing critical breathing room.
Check Unemployment Eligibility
Furloughed workers, whether in the public or private sector, may qualify for unemployment benefits, depending on state regulations. Benefits are typically based on your previous earnings and are often limited to 26 weeks. Each state sets its own minimum and maximum weekly benefit amounts. For example:
- Wisconsin: $54 minimum, $370 maximum.
- Massachusetts: Up to $1,033 maximum.
- Puerto Rico: Up to $190 maximum.
Note that unemployment benefits are not available in all cases. Workers on strike, working without pay (like essential federal employees), or fired for cause are typically ineligible. If you qualify, these benefits can help bridge the gap until your income resumes.
Assess Savings or Benefits Against Your Needs
Compare your available resources—savings or unemployment benefits—to your bare minimum budget to estimate how long you can sustain yourself without income.
Ideally, you have an emergency fund covering 3–6 months of expenses, which can provide confidence during income loss. However, a 2025 Bankrate report indicates only 46% of Americans have enough savings for three months. If your savings are limited, use potential unemployment benefits to make the same calculation and plan accordingly.
Explore Alternative Income Sources
Federal employees may face restrictions on taking new jobs during a shutdown, especially if they’re still working without pay. However, other income options exist:
- Sell unused items: Create a list of items you can sell and a schedule to maximize their value.
- Rent out space: Consider renting a room in your home.
- Freelance services: Offer skills like writing, tutoring, or consulting if permitted.
Having a plan for supplemental income can reduce stress and provide financial stability during the disruption.
Stay Resilient Through the Crisis
Losing income unexpectedly can feel overwhelming, especially when the timeline for recovery is unclear. By calculating your bare minimum budget, you gain clarity and control. Contacting creditors and exploring unemployment benefits can further ease the strain. Finally, planning alternative income sources ensures you’re prepared for prolonged disruptions.
These steps create a practical roadmap to not only survive but thrive through income loss, regardless of how long it lasts.