The market was essentially flat last week, as the trade war with China and the government shut down both continued to impact stock prices. While we see headwinds with a softening job market and some loan defaults, consumer spending remains resilient.
If you’ve been affected by the shutdown, there are some steps you can take to weather the storm. First, use this time to go through your checking account and credit card statements. Look for recurring charges, especially for subscriptions you may no longer need or use. You can also check your phone for subscriptions and turn those off. If you’re non-essential and have some time on your hands, decluttering can help with tax deductions as you take things to a thrift store or generate extra cash if you hold a yard sale.
If you’ve run through your emergency savings and are struggling to make ends meet, several lenders are offering no-interest loans for those affected by the shutdown. You’ll still need a good credit score to access these loans. Another option is a loan from your Thrift Savings Plan. You can borrow the lesser of $50,000 or half your account balance. You’ll have to repay the loan within five years, and payments will automatically be deducted from your paycheck once the government starts up.
If you are worried you may fall behind, be proactive and contact your lenders. Communication is key, and some lenders may be willing to put your debt into forbearance during the shutdown.
Once you’re back at work, and pay off any loans you’ve taken out, focus on building an emergency savings account holding six months of living expenses. Open a high yield savings account and split your paycheck; have $10-20 of each check go directly into savings. Over time, increase your regular contribution to savings. Having that buffer will help protect you from life’s disasters, not just the inevitable shut down.
Your action item this week is to buy your Halloween candy. This gives you plenty of time to eat it all, and still run out to buy more for the trick or treaters.
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