3 Personal Finance Lessons From the Government Shutdown

government shutdown

The government shutdown from December 22, 2018, to January 25, 2019, was the longest ever in the history of America. It was 35 days of pure misery for people working in government offices and government-funded establishments. 

Departments like Agriculture, American Battle Monuments, Commerce, Defense, etc are deemed non-essential by the constitution and the government had total rights to shut them down during the last financial budgeting. The purpose of this post is to make you aware of how fragile and unreliable a government job is.

What is a government shutdown?

Lack of funding and disagreement(over budget) between political parties is the biggest reason behind a government shutdown. During this period, all non-essential government offices remain closed and their funding is transferred somewhere else.

For instance, in 2018-19, the budget for the year 2019 was falling short as a result of the construction of the border wall between the US and Mexico. Hence, the government decided to let the middle class of America suffer for 35 days. The workers worked without a paycheck for those 35 days.

Here are the 3 personal finance lessons from the government shutdown.

1. There are no stable jobs available

No matter how many warnings the government gives, there will be some people who will still believe that their job is stable and secure. This is a coping strategy that allows them to be lazy and continue to live their lives paycheck to paycheck.

The government shutdown in 2018-19 exposed the weak spots of thousands of Americans who relied heavily on their jobs to pay their bills. It’s not like they had to live without a paycheck for 6 months, it was just 35 days and they still got affected.

2. Rely on emergency funds during a financial crisis

emergency fund

Are you secretly afraid of running out of money and going broke one day? You are not alone. There are millions of people who do have a clear plan of what they will do if they lose their jobs.

Along with your savings account, you should also create an emergency fund on which you can rely on if things don’t go your way in the future. You don’t know when the next government shutdown will befall and the personal finance lessons you learned from the past shutdowns should not go to waste.

3. Cultivate a wide range of transferable skills

This is the most important lesson I learned from the last government shutdown. Gone are days when you could rely on one or two skills that you have to help you find a job. Most people learn their skills on the job itself. And most often, their skills are job-specific. Which means, they are only applicable for their current job.

If the unexpected is to happen sometime in the future and they lose their jobs, their current skills become useless for other employers. Hence, cultivate a wide range of skills that can be easily transferable from one job to another.


The last government shutdown lasted just for 35 days and it still shook the American economy. It massively impacted the lives of common middle-class people. Imagine what could have happened if it would have lasted longer than that. Are you prepared for the next financial crisis? If not then you better take drastic steps to become self-sustainable.

Will Social Security Still Be There When I Retire?

social security

Social Security is the ultimate messiah that takes care of your financial needs when you get old or develop a disability. In America, the official name of Social Security is Old Age, Survivors, and Disability Insurance (OASDI). If you are new to this subject, bear in mind that Social Security is not a government funded retirement plan. Current workers pay a tax called the Federal Insurance Contributions Act (FICA) which is used in funding the Social Security payments to current retirees.

3 Social Security myths that you need to be aware of.

1. You should start taking Social Security when you turn 65

This is a myth that if taken seriously can severely impact your Social Security payments. The correct age to begin taking Social Security is between your 66th and 6th birthday. It is recommended to take it later when your turn 72 as it will difficult to work and earn money at that age. By opting to take Social Security later, it grows each year by 8 percent.

2. There are no taxes on your Social Security benefits

Whether you file for Social Security as a married couple or an individual, you will have to pay income taxes on it. Social Security income is taxable for individuals having a total income more than $25,000 and married couples having a combined income of more than $32,000.  So, do not be under a false assumption that your Social Security income won’t be taxed by the government.

3. Young people don’t need to worry about Social Security

social security

This is a total myth as young people need to know everything about Social Security and how they can leverage its benefits when they grow older. You are on the right track if questions like “Will social security still be there when I retire?” come to your mind at an early age. Even if you are in your 40’s or 50’s, you should hire a finance expert or read blogs like this one to educate yourself on Social Security.

Will Social Security still be there when you retire?

There are no legitimate studies to prove that Social Security is not going to be there when you retire. I have heard many people say that Social Security is going to go bankrupt by the year 2034 and Americans will have to rely solely on their retirement savings when they get old. But these people don’t have enough data to prove the legitimacy behind their statements.

So, as a clear headed and rational person, I will say that Social Security will definitely be still there when you retire. Maybe the terms and conditions will change. The American government will definitely take care of retirees and disabled people in one way or another. According to the Social Securities website, 67 million Americans will see a 2.8 percent increase in their Social Security and Supplemental Security Income (SSI) benefits in 2019. They update the citizens every year by announcing the annual cost-of-living adjustment (COLA). And it has been seen that there has been a steady increase in the benefits received by the retirees each year. So, Social Security is not going anywhere.