And according to some insiders many are not prepared to deal with loss of income, not even in the short term.
The National Foundation for Credit Counseling is calling on these consumers to take action and contact financial advisors because at least for the near future some will not be able to pay their bills, “while others may be furloughed indefinitely.”
Since housing costs, both rent and mortgage expenses, make for American’s biggest expense, those living from paycheck-to-paycheck or do not have significant savings will feel the impact right away and are at risk of ruining their credit score.
NFCC Financial Literacy Survey data show so far in 2013 up to 33% of respondents admit to not paying all bills on time even when they are not under duress.
Another 39% have zero non-retirement savings and carry debt over from month-to-month. Up to 16% have utilized overdraft protection in the last 12 months, before the shutdown.
It may be too late for some federal employees to amend their poor financial planning and habits, said Gail Cunningham, spokesperson for the NFCC, nonetheless the government shutdown “should be a wake-up call for everyone, as very few have absolute job security.”
No one has ever regretted being financially prepared, Cunningham added, and preparation starts with understanding the current situation and talking to financial counselors.
NFCC is advising these customers to use NFCC’s new Sharpen Your Financial Focus program to assess the current financial situation free of charge by visiting www.SharpenToday.org.
The nonprofit is also offering MyMoneyCheckUp, another free online financial self-assessment tool that offers personalized budgeting, credit management, saving and home equity services in English or Spanish.
NFCC suggests mortgage lenders and servicers can collaborate with its certified financial professionals who are available for one-on-one financial reviews and ready to help homeowners find solutions to any immediate concerns, including a framework for their next steps and ways to create a cash-flow calendar for bill payments.
“If there is a quick resolution to the shutdown, nothing has been lost by implementing the above steps,” Cunningham said.