The longest government shutdown in history has ended, but for the hundreds of thousands of workers who were furloughed or worked without pay, many are seeking resources to keep the bills paid and the lights on.
Carl Carlson, CEO of Carlson Financial went over options workers have and what you should and should not do.
Carlson said for many people who don’t have an emergency fund, they are going through a very rough time. The first thing one should do is cut down on all discretionary spending temporarily. For the bills and expenses that remain, reach out to those companies to see if they are offering extensions or waiving late fees. (City utilities, cell phone providers, auto lenders).
After you try to minimize or defer expenses, for the obligations that remain Carlson said people should check with their bank or credit union, as some are offering no- or low-interest rate loans.
People should also contact their mortgage lenders as some will allow them to take money out of their home equity to use during the shutdown.
For people with money in retirement accounts or college savings accounts, accessing that money may mean triggering tax liabilities and potential penalty fees, unless you do it carefully. A couple of the better options include taking Roth IRA contributions out. If the earnings are taken out it would incur a penalty, but one can always take out the amount the put in, penalty free, Carlson said.
Another viable option is taking a TSP or 401(k) loan if eligible, on which you have five years to pay yourself back, though you want to make sure you plan to be with company until it’s paid back.
Home equity, bank loans, retirement accounts could be some sources of cash for people. Additionally, if someone has whole life insurance, borrowing from the cash value is a good option.
Some may be eligible for unemployment benefits. Many local businesses or municipalities are offering their own benefits too, free food, free massages for furloughed workers.
The local food bank, Salvation Army are helping people out but Carlson said in some cases it is going to take some creativity.