5 steps to surviving a furlough or layoff

NEW YORK, NY - OCTOBER 01: People look at a sign informing them that the Statue of Liberty is closed due to the government shutdown in Battery Park on October 1, 2013 in New York City. Federal museums and parks across the nation are closed starting today due to a government shutdown for the first time in nearly two decades. The Dow Jones industrial average, the S&P 500 and the Nasdaq all rose slightly higher in early trading Tuesday morning. (Photo by Spencer Platt/Getty Images)
Spencer Platt

(MoneyWatch) The government shutdown is likely to create a familiar problem for millions of federal workers -- a temporary loss of income. However, as anyone who has had a lapse of income between jobs can attest, a temporary job loss is survivable, as long as you act wisely and fast.

Whether you are on furlough because the government shut down, or if you are between jobs as the result of a layoff, these five steps will help you survive a temporary job loss without permanent harm to your finances.

1. Cut back. Because you know that the job loss is temporary, it's tempting to carry on without adjusting spending. But this grin-and-ignore-it strategy could leave you broke in short order, putting you at serious risk if the furlough or job loss proves more lasting than you anticipated. So put yourself on a discretionary spending diet. Eliminate costly evenings out and shopping trips for anything that's not a necessity. Consider putting other discretionary services, like the weekly housekeeper or gardener, on furlough until you're back to work. After all, you now have the time to do these things yourself, and it's smart to conserve as much cash as you can.

2. Count your cash. Surveys indicate that the typical American family has less than three months' worth of living expenses set aside to handle financial emergencies like being out of a job. Take a look at the amount you have and determine how long it will keep you at your reduced spending rate. If you can't last three weeks much less three months, you might need to take more drastic steps, such as putting your cable subscription or gym membership on hold, too. Even though these bills usually are governed by annual contracts, most companies allow for temporary breaks for people who move or lose their jobs.

3. Use credit for necessary purchases. It may seem counterintuitive to use your credit card at the grocery store, but what it does is allow you to preserve your cash for the bills that you can't stretch out, such as the rent or utilities. You'll want to pay off the credit cards in full when you're back to work, of course. And in the meantime, you'll pay interest on any balance you leave on the cards. But that could be a small price to pay for the ability to preserve your cash for a longer stretch. 

4. Consider part-time work. You know it's just a matter of time before you go back to work. But if your job loss appears to be one that could last several months -- and that's longer than your savings -- anything you can do to earn money will allow you to stay solvent longer. Consider night and weekend jobs with companies like Costco, Trader Joe's, Starbucks and others that hire copious part-time workers. Although some of these companies will be reluctant to hire you, if you're not likely to stay after the furlough ends they could be more interested if you'd be willing to work some shifts even after you return to your normal job. And, having this second job -- even if it's only a few hours a week -- could help you get your financial life back on track following the furlough.

5. Get help. If a temporary job loss decimates your finances, you may need a budget or debt management makeover. You can get referrals to non-profit credit counseling agencies that both teach classes and provide one-on-one counseling at the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies.