Navigating a Government Shutdown: Survival Mode Budgeting & Alliance Coaching Sneak Peek | 84

Right now in the United States, we're going through a government shutdown. And so it's affecting a lot of people and a lot of our personal finances because if we don't have an emergency fund set up, if we're not prepared for things like this, then that's when we can make impulsive decisions and we can go. For. Payday loans and we can start getting, you know, Helocs on our home, equity lines of credit on our home and doing all of these, taking out loans on our retirement and things like that. And that can really start to snowball on the opposite direction.

And that's kind of what happened for my family and I when we got into financial trouble and our paychecks weren't guaranteed. The whole point is there was some stuff we could control and then there was other stuff that we couldn't control and so. Right. You asked. And I'm answering. So today's episode is a sneak peek behind the scenes of the Alliance coaching program. And these are questions straight from members of our community who are working on their finances and have an opportunity to come every single month to office hours with myself.

And I answer there's very specific questions based on where. You are in your financial journey. Where you are in the process of whether you need to focus on your creating your emergency fund or if you're working on your debt snowball and give. You a real. Practical tips wherever you are in your journey and and the opportunity to ask all the questions. So today's episode is a sneak be a sneak peek behind that. So I hope that this is helpful for you, but also to get a understanding of what it's like to be a member of the Alliance coaching program.

And a little teaser. There's going to be some new updates coming very soon, so I'm going to be. Rolling those out. To my e-mail list in a couple of weeks. So if you're not on that list, make sure you get on. You can get to my website at debtrebelpodcast.com and join there. You can also get your free debt Rebel starter, Kate, and you'll be able to find out those updates as soon as they come. This will be the last opportunity that the founder pricing will be available for, for the membership. So if focusing on your finances for the coming year is something that you want to work on, I highly recommend you jump on that e-mail list and find out more about that.

But today's episode, I hope it is encouraging for you. I hope it's a blessing for you. And maybe we'll. Answer a question you didn't know you had, so stay tuned. All right, so wasn't that awesome? So those questions were previously submitted by members of the Alliance coaching program and whether they had an opportunity to be there live for it or if they're listening to the recording, which is available, All the recordings are available inside the community. They're getting their questions answered.

And so I've got some cool stuff like I alluded to the. Beginning I'm. Going to be rolling out for additional support within the alliance coaching program. And so I can't wait to share that with you all. So I hope that today's episode was helpful. And if you want to get some more personalized answers to your money questions every single month, join us inside the Alliance Coaching program. All right, we'll talk soon. Right now, I know there's a lot that we can't control, but the things that we can, and I want to talk a little bit more about that today, are the things that we can control.

And that's how we spend our money now. And so if you're in this situation right now where you don't know if your next paycheck is coming, and I know that's a very close thing in our household as well, is, is how do you create a shut down or survival mode budget? So we talked about survival mode budget is like the bare bones stuff. And we talked about the IP taking that budgeting master class. We talked about that in there. And then we add on all the other things afterwards, like including our our debt elimination or debt snowball.

And I did get some questions about that today. So I'm going to cover that a little bit more. But we want to focus in on the things that are most important to keep a roof over our head. Excuse. Me a roof. Over our head. Food in our belly and transportation to and from work. So if you are maybe you're a government employee or you know, someone that's a government employee and they're furloughed right now, then they don't have to go to work and they're still not getting paid. But then there are some people that are not getting paid and then still have to go to work.

And so if that's you and that transportation spot, you want to make sure that those things that transportation to and from work is paid for. So if you have car payments, making sure that car payment is paid and you know, you have gas that you can get to and from work. So cut down on some of those extra extra trips if you can, so that you can conserve your money as best as possible. And then like I said, the roof over your head and food in your belly. So the tip that I give every single time we jump on a call is supercook.com or using ChatGPT to create recipes based on the food that you have on hand right now, because our families cannot skip meals.

And a lot of, sorry, the TV just came on randomly. A lot of budgeting will tell you, you know, a lot of other budget gurus will tell you that take care of, you know, pay yourself first, do all of these things first. And then whatever's leftover is for gas and gas and food. And where you can get into a little bit of trouble with your budget is if you plan all of your expenses and then you leave that transportation, so many gas and food last. And that is we're going to flip that upside down. And so for your survival mode budget, you want to make sure that you're mortgages paid, your utilities are paid.

I would also include in there making sure that your health is covered. And so whether that's if you have to pay your health premiums or if you have co-pays, don't skip doctor visits right now if you can, if you can help it, If there's some things that can be, you know, put off a little bit, that's that's totally up to you. But I would say do not. That's part of the essentials is making sure that your health is is managed and that you can keep a roof over your head because that's super important to so that you can be your best as a parent for your family.

So a quick check in as we I like to do accountability check INS is just seeing how you feel like your spending is lining up with the plan that you had for the month. Okay, So if you are in a situation right now where your paycheck is uncertain and this could be a spot where we go pivot, pause, hold on, we got to make a new plan. And that's where I say month to month, your budget is going to look different because things happen, your priorities change. And so if you know, things were a little bit different last month and then all of a sudden we had this government shutdown and it's affecting your finances, then your your priorities are going to shift.

It's going to be less about the, if you're doing your debt snowball and you're working on that and it's pausing that. So one of the questions that came from one of our alliance members is they're getting ready to pay off their car and has paused that because they're affected by the government shutdown. And the question was the car payment is paid through December. Does she continue to pay that every single month or hold on or wait until the shutdown's over to continue those payments? So my answer to this question is, since you're already paid through December is you've, you've already, you've already taken care of October's already paid November.

That is absolutely great. So I would say whatever you're, you are planning on paying on additional payments, hold on to that for now because that you might have to use for food or transportation or you might have to use for your mortgage if your paycheck is going to be short or non existent for the next few weeks or months. So pause on that and then we will re evaluate when that time, when that time comes, when you get closer to December and you realize, OK, like that maybe we don't know, the shutdown's over and things are back to quote UN quote.

Normal or. Maybe it's continuing on and you need to adapt and change. From there but. For right now, hold on to any extra funds that you have. So making sure that those those priorities are paid and then anything that's left over. And that's why that budget is so vitally important, especially in scenarios like this is whatever is leftover, you're going to hold on to that and save that. You could create a separate emergency fund or you could just add that to what you already have that X that $1000 that you have set aside.

So if you are in that financial crisis mode right now, then maybe buying some new clothes unless it's absolutely necessary is a, you know, as a pause. I know for us, there's a big just between friends sale coming up and I have a bunch of items that I'm going to be selling there. And so that money will be able to that'll be a wash. So whatever I sell, I can spend. And so that's not going to come out of my clothing fund for my daughter. Get her, you know, replace some of her shoes that she's that she's worn out, that kind of stuff.

So this is the, this is the time of year, not only because it's October and coming into the holiday season, but also because we're kind of in a crazy season financially with, with our economy and the way things are. We need to kind of be more conservative with our spending. And so if that's where, if that's where you are, this is a great spot to kind of tweak and work with your budget and see what things need to, what things need to be reduced and what things can be paused for a little while until you can get your financial footing again and know that your paycheck is going to be coming in.

Quick pause, friend. If you're tired of feeling like you're doing this whole money thing alone, I want to invite you into the Alliance. It's my group coaching membership where busy parents come together to build financial stability. Finally, stop living paycheck to paycheck and start making real progress without the overwhelm you'll get. Monthly live coaching with me on demand workshops and a community. That actually gets. What you're going through right now, it's only $27.00 a month and I would love for you to join us at Jewels, the Budget nerd.com/membership.

That's JEWLZ, the Budget nerd.com/membership. All right. Let's get back to the. Show this is a different question that was submitted by another alliance number it credit scores and the financial crisis right now. So this is this is a tough one because it depends on what your priorities are. What I teach and what I live is my credit score is my credit score is just some number that the credit reporting agencies and lending institutions use to determine my worthiness to pay back alone. My goal is to never have to use credit ever again.

And so I don't care what my credit score is. I don't actually even know what my credit score is. And I want to remind you also, your credit score doesn't define who you are. It's just a number that says this person is worthy enough to take a risk on for them to pay back the money that you're going to lend them. And so it is just a, it's a number. That's all it means. So if this is a scenario that you find yourself in with the financial crisis and you're having a hard time making those debt payments, communicate with your creditors first and let them know, hey, I'm affected by the government shutdown, furloughs, that kind of stuff.

My, my income is unstable right now. Let them know ahead of time and then take care of those survival mode budget items 1st and you'll notice on that, on that every dollar budget, that is the very last thing. And that's where it should be because those other things are more important. That is kind of those things that, you know, we need to address it. But there are things that are happening in the past and we need to address the present and be prepared for the future. And so when you're in crisis mode, we want to make sure that those basic needs are met and then everything else will take a backseat to that.

So yes, if you are unable to make your credit payments right now and your credit score takes the takes the tank, which is what happened to to us, so be it. And I know that that's a really can be a really hard pill to swallow sometimes because we are taught that our credit score is like this number that we need to achieve. And once we get there, then it it's, you know, it's a sign of success. And I want to challenge that thought and that belief because for my family and I, we're much more successful because we have not used credit to fund day-to-day life and we enjoy it so much more because we don't have that added stress.

But if you do find yourself in that situation, talk to your creditors and let them know that your income is unstable right now, and then work on a plan with them now. That's why that budget is so vitally important, because you'll know what you can commit to and what you can't commit to when it comes. To repayment. So if you know you're only going to have. You know, $100. Left after your utility, you know, food, utilities, mortgage, medicines, those types of things are taken care of, then I wouldn't commit to any kind of repayment plan yet.

Then you know, and make sure you take notes of those conversations so that when, when you revisit it, because we do find ourselves sometimes, especially when we're stressed out and finances are a big part of that, that we can forget some of the conversation. So take some good notes so that when you go back to revisit it, when you're in a more financially stable spot and you're able to commit to that repayment, then you have the notes to to back that up. So how about, OK, emergency savings versus investing versus paying off your debt?

Which should you do first? What should you do first? Now, this is a great one because a lot of all of these things are very important. They're all part of your big financial plan. And I would say the thing that is important right now is 1, is your income uncertain? And I'm going to keep talking about that because it's affecting a lot of people, especially a lot of the conversations I've been having with different people. Savings is absolutely the spot. If you have anything leftover, put it in savings.

If you do not have $1000 emergency fund, put it there. Now, if you're one of the people that is not affected by by this right now, by the shutdown or the furloughs or anything like that, then you can, if you already have your $1000 emergency fund set up, you can move into that, that debt payoff that debt snowball scenario and works and work through that. Investing is going to come after all of this because once you have that eliminated, you're going to have so much more left to invest. The caveat there is, and we talked about this, I believe it was on last month's office hours, is if you have a employer match of any kind, if your employer matches any kind of retirement investments, then you need to whatever.

If it's 3%, then you give 3% towards that as that is free money that they're giving you. If you don't take it, then you're leaving money on the tables. If it's three percent, 10 percent, 5%, whatever it looks like, match that and then whatever is leftover that you normally would have put towards investing is making sure that emergency funds there and then your debts are getting paid off. Now the reason why that is the order the having that emergency fund is going to keep you from using that credit card on a regular basis.

And also I have found for myself and many of my clients is when you have that $1000 emergency fund, your emergencies look a little bit different than they did when you had the credit card. And I'll give you an example. We had a flat tire this week and could have been super frustrating but we took it to the tire shop and they fixed it for. Free. So sometimes when those things happen like that, it's not about necessarily having to buy a new tire. It is like, OK, let's pause and let's think instead of kind of just jumping to worst case scenario.

We don't have, we didn't have to get all new tires. The thing is when we when we can, when we can pause and respond to things instead of react to them, then we're going to be able to make more conscious decisions that line up with our plans and our goals. And so yes, was this the flat tire, frustrating? Absolutely. But we had things in place so that if we needed to replace that tire, we had an emergency fund to set aside for that type of stuff. Thankfully, we didn't have to. And so when you have that, you'll really be able to decide is this a real, true, in fact emergency or is this something that can wait?

And so I do want to address too, if you are in a spot right now where you have to dip into that emergency fund, do it because that's what it's there for, but do your very best to get it refilled as fast as possible. And that's where this budget comes in. And it's such a tool to help you organize your money, but also make sure all of the things that are covered that need to be, need to be covered in the scenario. So emergency $1000 emergency fund, then your debt pay off and then investing. Unless of course your employer is giving you any kind of retirement match then invest that.

Amount and nothing. More and nothing less. I'm excited about what is coming with the Alliance. There's some some great workshops I'm going to be putting together like this, preparing your money for the holidays and reorganizing things so it's a lot more user friendly. But you can find what you want when you need to and get you the questions answered that you want answered. So that's what office hours is about is this opportunity to just come together and ask the questions. And if you, I know that the times aren't always perfect for everyone.

And so if that is the case, these are all recorded. So you can listen to them or watch them at your leisure. And then also, if you have questions ahead of time that you want to submit, you can send those, You can drop those in the Alliance community chat, or you can send a voice memo to me at speakpipe.com/debt Rebel podcast and you can ask your question there. Thank you for tuning into the Debt Rebel show today. Ready to take your family budgeting to the next level, stop that paycheck to paycheck grind and start living debt free?

Head over to my website debtrebelpodcast.com. That's DEBT REBEL podcast.com. To grab resources. Tools and tips to make it happen, and don't forget. Subscribe. Leave a review and if you know another family that will love hearing today's episode, it would be such a gift for both of us. Your friend. And me if you share this episode. And remember your debt. Free life starts with one brave step, and I'm cheering you on every step of the way. We'll talk soon. Debt Rebel.

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