How Could a Government Shutdown Affect Me Financially?

There’s been a lot of talk about government shutdowns in the last few months. But what does it really mean for us financially? From food programs to employment, a government shutdown could have far-reaching effects.

In this blog post, we’ll take a closer look at why this is happening, the potential financial impacts, and what you can do to minimize the impact on your wallet.

Why is a government shutdown possible this November? 

At the end of September, Congress was able to come to a short-term agreement and narrowly avoided a government shutdown that was set to begin October 1, 2023. But the agreement was only able to ensure that the government remains open through November 17. 

Now, those involved will have to go back to the drawing board to avoid a shutdown. Hopefully, it won’t come to that, but with the tumultuous political climate, it’s important to understand how a government shutdown could affect you financially if one does happen. 

A government shutdown could affect many areas including:

• Food programs
• Childcare
• Employment
• Retiree programs 

Let’s take a closer look at the programs and benefits that might be affected so you can see how it may affect you and your family, and you can start planning for the unexpected. 

Potential Impacts on Food Programs

A potential government shutdown could affect many different programs, including WIC and SNAP, which could cause problems for people and families who have low incomes.

WIC

The Special Supplemental Nutrition Program for Women, Infants, and Children (WIC) is a program that helps pregnant women, postpartum mothers, babies, and children under five access healthy, nutritious foods and health support. 

WIC may be affected by a government shutdown in two ways: 

1. If the government does shut down in mid-November, WIC benefits will stop almost immediately. This is because the contingency funding for the program would run out very quickly. 
2. Part of the proposed budget negotiations (House fiscal year 2024 agriculture appropriations bill) will reduce WIC funding for 2024 by 12% if passed. This would result in a decrease in benefits for those participating in the program and could lead to program waiting lists.

SNAP

The Supplemental Nutrition Assistance Program (SNAP) could be similarly affected by a shutdown. 

1. If the government shuts down, SNAP benefits will not stop immediately. Benefits will remain in place for November regardless. But in December, benefits could be reduced or stopped depending on circumstances and how negotiations are going. 
2. Similarly to WIC, if the House’s proposed agriculture appropriations bill passes, the SNAP budget will be decreased, resulting in decreased benefits for those in the program. 
3. SNAP benefits could also be affected by House Republicans’ proposed Debt-Ceiling-and-Cuts Bill. This bill proposes expanding the SNAP benefits work-reporting requirement, making benefits harder to obtain and impacting people ages 50-55 with a lower income.

Impacts on Childcare

If the government were to shut down, those who use the Head Start and Early Head Start programs to provide childcare would be in a difficult spot. 

Federal funding to these programs would stop. This means some Head Start programs would have to temporarily close their doors, leaving an estimated 10,000 children nationwide without access to childcare. 

The financial impacts of this could come from having to pay for childcare elsewhere or from having to take time off work to be with your children while they are home.

Impacts on Employment

In addition to benefits and childcare being reduced or halted, some individuals may find themselves working without pay or furloughed from their jobs. 

Those who work for the government in what are considered essential roles, like those on active military duty, TSA employees, and some others, could be required to work without receiving paychecks. They will get paid backpay once the shutdown is over. 

Other federal employees, civilian federal employees, and contractors might find themselves temporarily without work with no pay until the shutdown is resolved. 

This lack of work and lack of pay at a time when benefits are being reduced could cause financial hardships for many American families.

Some Programs May Face Delays

Other government programs won’t experience closures but could face delays. Social Security, Medicaid, and Medicare will still provide benefits. But if you experience issues with your benefits or need to connect with a person for help, you’ll likely experience delays and longer wait times. 

If you need something addressed with your benefits now, see if you can get it addressed before mid-November in case a shutdown occurs. If a shutdown occurs and you need help, be persistent.

4 Steps to Prepare for a Potential Shutdown Now

There is so much uncertainty surrounding the potential government shutdown. It can be hard to know exactly how it might affect you and your finances, but there are a few things you can do now to prepare. 

1. If you have an emergency fund and can add even a little bit to it, do it. This can help if some of the benefits you’re on get reduced or cut.
2. Take a look at all areas of your budget now to see if you can make adjustments or shift funds to temporarily cover potential decreases or delays in benefits or pay.
3. Research support within your community. Find other potential sources of support for securing food or childcare. If you aren’t sure where to look for support, a great resource is www.findhelp.org. On Find Help, you can search for specific types of help in your geographic area. 
4. If you’re worried the government shutdown might affect you financially, find someone you can talk to about it.
   
   Maybe you know others in a similar situation, or you have a friend, loved one, or religious leader you can speak to. You could also look for an Accredited Financial Counselor® (AFC®) who can help you plan for how to handle a reduction in benefits.
   
   Sometimes, an outside perspective can help you see solutions that you may be too close to the problem to see. 

Remember, a government shutdown is not guaranteed, but being informed about how it might affect you financially and having a plan can help you if it does happen.