The Shutdown Road to Recovery

The historic government shutdown earlier this year affected over 800,000 Americans who had their lives turned upside down and faced extraordinary financial uncertainty. As days turned into weeks and no end in sight, the shutdown brought to light a problem facing the country: the number of Americans living paycheck to paycheck. According to a 2017 survey by CareerBuilder, 78% of Americans currently live paycheck to paycheck and according to a recent report from the Federal Reserve Board, four in ten Americans cannot cover an unexpected expense of $400 with cash.

Being a DC based company, we saw firsthand how the shutdown affected people and their families, and we wanted to do something to help. We knew that even once the shutdown ended, the problem of “financial fragility” would persist. As a company, we responded by offering LifeCents to all federal workers and those affected by the shutdown and waived all fees. Those who signed up received a free assessment of their financial health and were offered a free complimentary one-on-one financial coaching session.

One participant in our program was Charles Smith, an Internal Revenue Service employee with 32-years of service under his belt. Charles had many sleepless nights as a result of the turmoil and stress that was caused by the shutdown. “I felt that the shutdown took away the dignity and honor of public service,” said Charles, “I no longer felt valued as a public servant.”

Smith was not alone. Of the federal workers who signed up for LifeCents during the shutdown, 24% reported that their physical and emotional state of mind took a toll and 22% reported that they missed a significant payment. There were other alarming statistics about the financial behaviors of people affected by the shutdown. Twelve percent reported taking a hardship payment from their retirement fund to cover expenses while they were not receiving a paycheck, 10% indicated that they took out a loan to pay for short-term bill and 5% reported that they visited a food bank.

These numbers are real eye openers and shine a bright light on the realities that affect most American families, not just those affected by the shutdown. The bottom line is that people simply are not prepared for financial emergencies and persistent financial insecurity is a growing crisis affecting people in communities across the country.