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5 Tips After The Federal Government Shutdown

ElitePersonalFinance

Last Update: September 9, 2021 • Scholarship •

The Government shutdown has affected about 800,000 federal employees and thousands of contractors. Some are due to work without direct pay, some given temporary leave (not paid for), and others have not yet received payment since the shutdown began. The majority wonders if the Government will consider their efforts even after the closure, and more importantly, how they can avoid this impact.

Interestingly, the affected workers can still escape the shutdown trap by solving some of their financial burdens. You wonder how? Below are survival tips that will help walk you through these hard times.

Consider Income-driven Repayment Plan for Student Loans

Pay As You Earn (PAYE) and Revised Pay As You Earn (REPAY) are among the repayment plans. These repayment plans have some requirements.

Interestingly, if you meet the requirements (with about 25 years), you qualify for a student loan forgiveness. The income-driven repayment program regulates the amount required to repay a student loan depending on family size, one’s income, among others. The program means most federal student loans are eligible for almost one income-driven repayment plan. Therefore, the federal workers should not worry about the loans because it could be like $0 per month.

Emergency Fund

Having saved money to cover unexpected expenses is vital in our lives. Remember, one can climb out of debt or avoid borrowing after start saving in emergency funds in a high rate savings account. It’s hard to get affected by any emerging issues with this account. For instance, when the Government shutdown emerges, and you miss your payment, you can either use the money to supplement your unemployment benefits or cater for your necessities. If you don’t have an emergency fund, open yours today with at least six to nine months of expenses to survive the shutdown. It’s good to start saving earlier to get yourself out of many financial scrapes since no one knows when the disaster will strike.

Transfer Credit Card Debt to a 0% Credit Card

The tactic of transferring the high-interest debt from one or more credit cards to a low-interest rate card is very crucial. It’s important to compare the best balance transfer credit cards with 0% APR to avoid the federal shutdown for at least 12 to 18 months. Remember, a balance transfer allows one to pay 0% interest on their balance for a set amount of time. Note that when the APR period ends, there is a possibility to owe the minimum payment.

It’s essential to consider clearing the interest on time to avoid digging into more debts. For example, the United States has an outstanding credit card debt of more than $1 trillion.

Refinance Your Student Loans

Student loan refinancing helps one clear the student’s loans faster and with a lower interest rate. However, the strategy is great for students with problems paying off their loans on time. During this time, a student can prefer refinancing student loans when unable to handle payments carrying multiple loans. You can imagine having a student loan debt, yet you have not received a paycheck. Since this is challenging, why don’t you start refinancing your student loan now, at least to survive the shutdown?

Vendors

It’s challenging to operate with multiple debts or recurring charges from vendors, customers, employees, and others. One becomes uncomfortable in their life. In case you have recurring balances, evaluate the best alternative, that is “negotiated agreement,” to successfully delay or reduce your charges. The charges may include; monthly bills, private student loans, rent/mortgage bills, and gym membership. However, if you cannot reach the agreement or lack the cancellation fees, you can cancel unnecessary services or look for early termination provisions to avoid penalties. Remember, successful negotiation will enable you to survive the Government shutdown.

In conclusion, the federal shutdown by the US Government is often unforeseen. Time and again, it causes inconveniences to many people who depend on paychecks to offset their bills. You are not adversely affected by such happenings. It’s essential that you master and act on the above tips to live a normal life even during hardships.

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