Photo-Illustration: by The Cut; Photo: Getty Images
LaChelle Johnson is used to stretching a dollar. Growing up, her mom struggled with money, and Johnson vowed to provide more stability for her own family when she had one. She and her husband got jobs working for the federal government and pursued side hustles in their spare time. But their learning curve was steep, and they wound up overinvesting in their own business ventures. When the government shut down in late 2018, it was a moment of reckoning: Johnson and her husband had three young kids, owed $40,000 in consumer debt, and couldn’t keep up with their bills. They had to move in with Johnson’s in-laws to get their expenses under control. Since then, they’ve dedicated themselves to becoming — and staying — debt free. When the government shut down in October, Johnson’s colleagues panicked, but this time, she felt prepared. Here’s how she’s managed to get by without a paycheck for the past six weeks and the advice she’s given to others in the same boat — or might be again in the future.
I’ve been working for the federal government for about a decade now, and I enjoy it. But like many people, I’ve been furloughed since October 1, so I’ve been unable to work, and I haven’t been getting a paycheck. My husband also works for the federal government, but he’s in law enforcement, so he was exempt from the furlough and was still getting paid, thank goodness.
I was born to teen parents and raised in a single-parent household. My mom was very young when she had me and my brother, so I literally grew up with her. We were not financially stable. We lived in a rough area in Prince George’s County, Maryland, and there were multiple times when we could not make ends meet and had to rely on family members to help us. We moved in with my mom’s mother or aunts on more than one occasion. I’ve been working since I was 14.
Eventually, I went into federal service because that’s what my grandmother and my mother did. It was ingrained in me that a federal job is secure. You can secure your benefits; you can secure your retirement. And I believed that. But now, for the first time in my lifetime, federal employees don’t feel that sense of security and stability. And that’s why I’ve been focused a lot on finding additional sources of income and helping others do the same.
I didn’t always know how to manage money well. My husband and I wanted to be entrepreneurs in addition to our federal careers. That led me to multilevel marketing businesses. Mary Kay was my first one. I also did Body Magic. My husband owned a dump-truck company, and he’s also a part-time real-estate agent. We didn’t have a lot of knowledge starting out, and I learned the hard way that overinvesting in certain businesses can result in a lot of debt. At one point, about six or seven years ago, we owed over $40,000 in consumer debt — revolving credit loans, business loans — and $100,000 in student loans too, between my husband and me. It felt like the biggest monkey on my back.
We also had three children still living at home, and we were living check to check. We took pride in giving our children something better than what we had, but we were drowning. That’s also when the last big government shutdown happened, at the end of 2018. It was during the holidays, so we didn’t feel like we could ask anyone for financial help — everyone is strapped that time of year. I had to kick into survival mode. To compensate for not getting a paycheck, I wound up doing eyebrow shaping and tinting in our basement to make extra cash, but it was not sustainable. One day, I was sitting at my desk, and my husband walked in, and I said, “This budget is not going to work. We have to do something drastic to cut our expenses.” And we decided to rent out our house and move in with my in-laws — my husband’s parents — for a year.
We sat down with my in-laws and explained our plan. We told them about the yearlong timeline and how it would enable us to pay off every single dime of our consumer debt. I think because we were so clear with them, they were happy to help us out. We paid them rent, but it was much less than market rate — $500 a month. And we contributed in other ways. We made sure that groceries were plentiful, and I cooked most of the meals. It worked out. And we were extremely grateful.
Still, it was a sacrifice. My in-laws were used to living in a home by themselves, just two people, and here we were, adding a family of five. My daughters were not thrilled about sharing a room. My mother-in-law loves to entertain, so it was normal for her to have impromptu guests on the weekends, and sometimes it was just like, Ugh. There’s already a lot of people in this house, and now there’s more. I often felt like an extra host. There was not a lot of peace and quiet. But we knew we were lucky. Not everyone is in a position to move in with family to save money. And we knew that the short-term sacrifice would have long-term benefits.
When we made that last payment on our debt, it was the best feeling for me. I felt like I was emancipated. And it made me even more hyperfocused on staying out of debt, because once you’re out of it, you don’t want to go back. We still use one credit card so that we can get points, but we’re very strategic about it, and we pay the bill in full every month.
When we moved out of my in-laws’ house, we were very systematic about keeping our expenses low. Instead of moving back into the beautiful single-family home that we owned, we decided to rent it out — which we still do — while we rent a smaller home in a different area with better public schools. Before, we’d been paying for private school for our three kids because our district didn’t have great schools. Now, we live in a high-rent district with good public schools, so we don’t pay for tuition. I also got rid of my car, because our home has amenities within walking distance — the grocery store, the nail salon, the dry cleaner. So we were paying only one car note and spending much less on gas. We maximized our retirement contributions and built an emergency fund.
At this point, our credit scores are immaculate. We don’t have debt. We’ve learned how to use our credit-card rewards so that we can plan trips and fly for free. My husband refers to me as Sergeant Slaughter when it comes to financial management and budget and credit, but it’s worth it to me, especially in moments like this. Now I do financial coaching so that I have multiple streams of income. I recently self-published a book, Rise Rich, which is a guide for first-generation wealth-builders. My government job is my main job, but it’s not my only one.
So many of my colleagues panicked at the beginning of the furlough. I’m in a million group chats where people have been consumed by stress. And I feel honored to be in a position to offer guidance. My first piece of advice is always to take a step back. Look at what you can control. Understand what you have in terms of cash on hand. What resources do you have access to? A number of credit unions and banks have offered zero-interest loans for federal workers during this time. Get a clear picture of which bills you need to pay for your essential needs and when they are due. Government workers get back pay when the government reopens; can you make phone calls to your bill collectors and extend the grace period?
Most furloughed federal workers are eligible for unemployment benefits from their state, but I’ve had a couple of people reach out to me because they’ve had trouble signing up. One work friend’s unemployment claim was declined because there was an issue with her duty station that was represented on her pay stub. I am always clear with people that I’m not a financial adviser, but I was able to help her find other grants that she could apply for through her state, in addition to unemployment, while she got it sorted out. I had another furloughed friend who was doing okay until Hurricane Melissa hit Jamaica, where her mom lives, and she was unable to send funds to help her family there. She ended up creating a GoFundMe. People have had to think outside the box.
You should also look at what assets you can leverage. If you have a home, you may be able to take a loan out on your mortgage and then pay it back. Some people can borrow from their retirement accounts. Make sure that you’re not borrowing more than you can pay back as soon as your paychecks resume.
In my own family, we have an emergency fund, and my husband is still getting paid. But our emergency fund can run out. It’s not going to last us months and months. If that were to happen, my next plan would be to try to get a zero-interest loan, which we could probably get because our credit is good. It gives me peace of mind to have a plan.
There are a lot of local resources for federal workers, too. Businesses have offered free or discounted meals, free car washes, that sort of thing. People might not think it’s worth it to save $20, but that $20 can really help when you’re running low on cash. Some places are offering discounted mental-health resources. Don’t be afraid to ask for help, including from your family. Be clear: “These are the bills I need to pay. This is how much money I need. This is what I can offer in return.”
Even as the shutdown ends, a lot of federal workers feel that their job security has been ripped away. And that’s a different kind of panic. People are wondering what they could do if — or when — they might lose their job.
I have a friend who recently lost her job at the Department of Education. She worked in that position for 20 years. She was ten years away from retirement. And she feels like she’ll never be able to retire now, because she has to start all over. But she has a lot of transferable skills. A lot of government workers don’t realize that they can use their work experience to find a job in corporate America. It might not be easy, and I know the job market is tough right now. But if you spend all your time complaining about the administration, and being annoyed and irritated, good luck. I’m not saying that everything is rosy, but you can’t allow yourself to be consumed by fear.
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