An employee furlough refers to a temporary leave or modification of normal working hours, typically unpaid, for a specific amount of time. I remember when I first learned about furloughs. Being a school teacher in 2009-2010 during the great recession a few working days were furloughed to help balance the budget. I couldn’t at the time grasp the concept to work without pay… I was like that’s slavery. However; I was able to create a budget prior to the furloughed days to ensure that bills would be paid.
However; forewarning isn’t always the case. Working for the Federal Government in the United States seemed growing up with one of the most financially secure jobs. But now with so much gridlock in Washington (both from Democrats and Republicans), furloughs are almost commonplace, sad but true.
During a time of extended furlough, many exhausts all of their cash reserves in order to stay afloat. What steps can be taken to keep extended furloughed workers financially secure? Here are a few to get you started:
Contact Your Creditors
If someone owed me money and they stop talking to me, that would be just rude. The same thing applies to the business world. You are only hurting yourself by ignoring phone calls or having your kids to lie and say you are not home. LET ALL YOUR CREDITORS KNOW your situation rather than just not paying or being late so they can work with you. Cutting off communication with your creditor is one of the worst things you can do.
Waste no time reaching out to all of the creditors you owe before payments are missed – credit cards, car loans, and mortgages, etc. Let them know that you’ve been furloughed. Be proactive!
Take a good look at your current budget. For now, start with your normal budget and then take a hard look at what you can go without for the short term to curb your expenses during the furloughed period. Just pay your minimum payment amount on all remaining bills. It can be hard to figure out exactly how much money you spend each month. Creating a budget can help you plan ahead to learn how you can save money for important things in your life. Pay rent, utilities, and food first. Credit cards and loans should be last.
Utilize Your Emergency Fund
An emergency fund is an account for funds set aside in case of the event of a personal financial dilemma, such as the loss of a job, illness or a major repair to your home. Christmas, birthdays, anniversaries, vacations, monthly bills and things that of that sort are not emergencies and should not be spent from this account. If you have an emergency fund, try to use it sparingly. Once you are receiving your regular paycheck, be sure to save at least 10% each pay cycle in a separate bank account to replenish (or start) your emergency fund.
Look at Side Hustles/ Part-Time Income
There has never been a better time to take on a side hustle for extra income. Below is an article on 7 different side hustles for extra money that can generate a decent amount of money, especially until your furlough period is behind you. Take a look locally for short term jobs or projects that can help bring in some immediate cash.