Federal shutdown puts spotlight on personal finances

Wednesday, January 16, 2019

We see the stories as the federal shutdown drags on. Canadian air traffic controllers buying pizzas for their colleagues south of the border, federal employees forced to work for nothing, leaving part-time jobs they took to try to pay their bills, food drives and suggestions for making ends meet.

We’re all hoping the stalemate will end soon so things get back to what passes for normal soon, trash collected in national parks, health and safety inspectors back on the job, employees being paid on time.

But the shutdown shows just how many of us are unprepared for any sort of financial crisis, including those who are paid more than most of us.

According to the Congressional Budget Office, on average, civilian federal workers make 17 percent more than similar workers in the private sector, once wages and benefits are compared.

That means that the average federal worker would need to be completely without any income for nearly nine weeks in order to have a salary level with a similar private-sector worker.

Of course, both President Trump and Congress have committed to pay furloughed workers’ back wages once the shutdown is over, and their health coverage is continuing through the shutdown.

Whatever the source or level of our income, too many of us are living beyond our means. Several local churches and employers have offered employees and members help through a program promoted by financial guru Dave Ramsey, who also appears daily on a radio talk show.

Others offer good guidance for getting personal finances under control, but Ramsey’s, difficult as they may be to implement, are simple “baby steps.”

Commit to living debt free; start a $1,000 emergency fund; use a “debt snowball” to pay off debts starting with the smallest first; accumulate three to six months of expenses in savings; invest 15 percent of household income into Roth IRAs and pre-tax retirement; college funding for children; pay off your home early; build wealth and give to your church and other worthy causes.

As with a baby, the “steps” don’t happen all at once, can only be taken one after another, and there are bound to be a few stumbles along the way.

But if all of us would follow similar advice, news stories could focus more on general policy issues and less on personal struggles.

More on Ramsey’s Financial Peace University here.

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