What Everyone Should Learn from the Federal Government Shutdown

Whether you identify as Republican, Democrat, or Independent, there is a unifying message in the fallout from the federal government shutdown: every one of us must prepare for the unexpected.

I was so angry, frustrated, and heartbroken that 800,000 employees and their families were thrown into financial chaos when politics—not economics, or job performance, or anything rational—robbed them of their paychecks. It’s not just the federal workers whose lives have been upended. It’s also all the people who work in businesses that rely on federal workers having a paycheck and spending some of that paycheck in their community, be it for groceries, a meal out, haircuts, etc.

Talk about being blindsided.

It compelled me to give advice I have never given before. In a special shutdown blog post, I explained the best way to come up with cash to cover essential living costs, including my permission to take a loan from either your Thrift Savings Plan (Federal 401k) or a spouse’s 401(k) if absolutely necessary.

That was advice for people who were innocent victims of politics. But there is a clear lesson and warning for every household: you could be financially blindsided at any time. Don’t you dare think you are safe from a financial setback. What jobs are more secure than federal government jobs? And look what happened to them.

If you aren’t seriously working at building an emergency savings reserve, you are not living a financially honest life. I am not insisting you snap your fingers and automatically have the eight-month reserve fund that I recommend. But are you trying to end this month with more in savings than you had last month? Will you end this year with more in your savings than last year?

That is the sign of someone who is financially honest. And smart.

Please don’t start with me that you don’t have a penny extra to put into savings. It is the very rare household that can’t spend a little (or a lot!) less to be able to save more.

Pull up your credit card and bank statements for at least the last three months. Now start adding up every expense that was not an absolute necessity. Groceries: a necessity. Paying the utilities: a necessity. Loan payments: a necessity. Insurance premiums: a necessity. Anything else is an indulgence. And if you have yet to build a solid emergency fund, you should be eager and excited to identify spending you can reduce, or eliminate, so you will have money to put toward an emergency savings fund.

No, I am not kidding. You should be excited at the prospect of finding a way to build your household’s financial security. I guarantee you will be amazed at how powerful and confident you will feel if you begin to live a life where the pleasure of savings is as great–or greater–as the pleasure from spending.