If you're facing an unpaid furlough, use these tips to survive on a smaller paycheck. And if you're not facing furlough, read them anyway. If a government worker's job isn't safe, nobody's is.
If you’re a federal employee, unpaid furlough days might be in your future.
Until the sequestration unfolds in coming weeks, we won’t know how many will be affected, or how badly. But there are dire predictions floating around. For example, according to The Washington Post, the Pentagon estimated most of their 800,000 civilian employees could lose up to 20 percent of their paychecks for a period of 22 weeks.
It’s an unpleasant possibility for many federal employees. But in addition to our sympathy, we’re offering some tips to help anyone in similar circumstances. Read on for ways to manage without going broke or losing your quality of life.
1. Consider what you’ll save
While you won’t be earning anything on your furlough days, you won’t have any work-related expenses either. For example, if you drive 30 miles round-trip to work, using roughly one gallon of gas, buy lunch out, and wear a dry-cleaned suit, your typical spending might look like:
- Gas – $3.76 (average national price per AAA as of March 2)
- Lunch – $15.99 with tip
- Dry cleaning – $10
If you have one forced day off a week, you’ll save about $30, or about $120 a month. Small comfort, but it’s something.
2. Trim the fat from your budget
If you’re making less money, you’ll have to either cut back, or dip into savings. But spending less might be easier than you think. Many of us pay monthly fees for things we don’t use often (or ever). Hopefully you’re tracking your expenses with a free online service like PowerWallet. If you’re not, start. But whatever method you use, look at recent expenses to see what you might be paying for but not using. For example:
- Gym membership – $29.99
- Tanning membership – $24.99
- Streaming video subscription – $9.99
Once you spot leaks, call and cancel.
3. Wipe out unnecessary expenses
Cutting out the extras, even temporarily, can help. You probably have a few expenses you could cut out without sacrificing your quality of life. For example:
- Cancel cable – potential savings: $75 a month (Canceling cable doesn’t mean going without TV. See 3 Steps to Cut Your Cable Bill 90 Percent.)
- Keep the cable; ditch the premium channels – potential savings: $39 a month
- Drop your land-line and use your cell phone instead – potential savings: $30 a month
- Skip the concert tickets – potential savings: $45 a month
- Eat out one less night a month – potential savings: $25 a month
These five actions could save $175 a month (or $139 if you want to keep your basic cable). But don’t stop there. Look over your expenses in the last few months, and see what you can trim without feeling the loss. Like concerts? Find free ones. Like live sports? Drop pro and go amateur. Like dinner out with friends? Host potlucks instead. Like to buy e-books? Get them free at the library.
In short, when times get tough, put your wallet away and use your imagination instead. Articles like 19 Tips to Save on Entertainment can help.
4. Cut back on food costs
In 2011, (the last year data is available), the Bureau of Labor Statistics reported the average American family spends $6,458 yearly on food – or $538 a month. This is one expense you can easily save on. In 30 Tips to Save on Food, we offer ideas like:
- Shop salvaged grocery stores. Buying dented cans and damaged packages can save you 30 to 50 percent and we’ve got a list of salvaged grocery stores.
- Use ads and coupons. I’ve saved up to 50 percent by planning my meals around the weekly sales.
- Bring a list. Make a list before you go and only buy what’s on the list. That simple move alone could save 10 percent by avoiding impulse purchases.
- Buy generic. Shop the store brands on the bottom shelf and you could save 30 percent or more. See 7 Things You Should Always Buy Generic.
- Prepare it yourself. It’s ironic that the costliest food is often the least tasty and nutritious. If you’ve got more time on your hands, use it to prepare more meals from scratch. You’ll eat better and spend less doing it.
5. Dip into savings cautiously
If you have to dip into savings, do it sparingly. Granted, the purpose of an emergency fund is for emergencies, and a 20 percent pay cut certainly qualifies. But do everything you can to reduce expenses first. Otherwise you might find yourself short when something even more urgent comes up.
One company I worked for years ago cut my hours, so I dipped into savings any time I needed extra cash, assuming things would turn around. They didn’t, and I found myself short when my car broke down.
6. Apply for unemployment compensation or loans
Rules vary by state, but in some places you may qualify for unemployment benefits if your hours are significantly reduced – it can’t hurt to find out. The United States Department of Labor has a list of unemployment offices by state.
You may qualify for a short-term loan from the Federal Employee Education and Assistance Fund. The loans are interest-free and up to $1,000, but have short repayment periods. You can read more and get an application at the FEEA website.
7. Make extra money
Use your furlough days to make some extra cash outside the office. Throwing a garage sale is an easy way to make some extra cash: See 13 Tips for a Super Yard Sale.
If getting up early on the weekends isn’t your thing, sell unwanted stuff online. Check out 5 Best Websites for Turning Junk Into Cash to help get you started.
You could also babysit or pet-sit in your free time. A friend of mine makes anywhere from $50 to $100 a week babysitting and she only works one or two days.
There are other ways to work from home, but be careful not to get ripped off. See Is There Legitimate Work From Home? for specific suggestions. Another source of ideas is 8 Weird Ways to Make Extra Money.
No job is safe anymore
The term “government job” has long been a symbol of security. Those days are apparently over. So even if you’ve dodged this particular bullet, now’s a good time to take stock. If you don’t have a savings account, start one. If you’re not tracking your expenses, do it. If you don’t have an emergency plan, make one. And if you’ve ever wondered how you could pick up a little spare money on the side, now’s a great time to turn your hobby, talent, or interest into a part-time gig.
Do you have tips that will help those facing furlough get by? Help others by contributing on our Facebook page.