This week, the Defense Civilian Personnel Advisory Service (DCPAS) sent out a BENEFACTS “Furlough Special Edition” newsletter to advise the approximately 800,000 Department of Defense employees about their benefits, plus offer a page of financial tips for “Financial Fitness.” Since guidance on how Federal employees are to take their furlough days, how benefits are affected, etc, have changed weekly and sometimes daily in the last six months, I found it moderately helpful to have an overview of current information in one place. My organization has been exceptionally open with keeping employees informed, so I knew much of the material already but I understand from friends in other organizations that not everyone is as informed; therefore, I did find that this Furlough Special Edition had utility for most employees.
However, I can’t really say the same about their financial tips. When I first knew the furloughs were coming, I put in an anonymous request for a lunch-hour financial series for my colleagues so that we’d be as prepared as possible for a pay cut–and I did pick up some really good tips and enjoyed the discussions with my peers. If you’ve been reading my blog for a while, you know that one of my spiritual efforts this year is to unload as much of my past-relationship-related debt as possible and all the financial and spiritual baggage that old debt–and old relationships–entails. Whereas I was paying off my loan regularly and slowly for a number of years, I’m now in a mad dash toward the last of it, and euphoric over my progress since December 2012.
Which is why when I read financial tips that do the intended audience a disservice, I have to point it out. The tips read more like a quick back-of-the-napkin offering that was meant to be helpful but just…missed the boat. Here’s why I think these financial tips are lame and how anyone facing a pay cut can do better than this:
Financial Tips #1
I completely agree with the idea of automatic savings, whether to a savings account or an investment account. This tip was a little too generic for furlough season, I felt. If you’re going through a pay cut, the funds you normally reserve for savings, investment, or retirement may be going straight to food, mortgage, and electricity. Better to stay out of debt as much as possible during a pay cut than to rely on loans and credit cards to get you over the hump.
Financial Tips #2
Again, it’s decent generic advice for saving money or spending less, but restaurants and movies during a pay cut when some employees can’t feed their families and pay the rent on time? Sorry, but the local restaurants will see me only once during my furlough, and that’s for a special occasion that’s already been paid. As for the movies, I never do concessions stands anyway (see my extensive blogging about diet and health!) but I’ll be skipping the $10 a pop at the movie theater, too. For entertainment, I have plenty I can do at home or with friends that doesn’t involve blowing cash. It’s a pay cut, people! A 20% furlough is easily 25-32% of your regular take-home pay. If you’re already on a budget, restaurants and movies probably aren’t going to fall within your first 75% of necessities.
Financial Tips #3
Sigh. Yes, by all means, turn off the TV and watch less TV. I had to shake my head at this tip, though. There may be “a lot of financial benefits” but less electrical use is probably not nearly as financially beneficial as simply getting rid of cable, especially premium channels. I was amused a few weeks ago at a young family complaining about how, on their single income, they would have to give up HBO, Showtime, and 600 TV channels since his pay was cut (he’s not a DoD employee). They’re a little above poverty level as it is, but since I gave up premium channels years ago (and TV to a large extent), I just couldn’t summon the sympathy for their having to cut back to basic cable. The average household, per The NPD Group’s study, paid $86 a month for basic TV and premium cable in 2011, with an expected bill of $200 a month for the same in 2020. That doesn’t include bundled services, like phone or internet. If you cannot pay your bills during a pay cut, then don’t just turn it off–cut the cord.
Financial Tips #4 and #5
Finance tip #4 just hurts to read. Stay away from credit cards in a furlough or pay cut situation. They are simply too much of a crutch to hold your lifestyle at full-pay status and let the credit cards fill in the gap “just until your pay goes back up.” If you carry credit cards, it’s psychologically much easier to spend money. The same is true of a debit card, but at least you’ll see the immediate fluctuation in your bank account. Best to stick to cash with any shopping/buying that must be done…or do what my Depression Era parents did: do without.
Tip #5 is another generic tip. Yes, pay your bills on time, whether you’re making more, less, or the same.
Financial Tips #6
No! No, no, no, no, no, no. No.
OMG. Forget the frequent shopper clubs and cards. Even if you shop there all the time. This is an old marketing trick that will convince you to play the game of scoring more points, collecting more fruit pictures, and ultimately buying much more of stuff you won’t use up in time (hoarders, anyone?) and stuff that you don’t even need. It’s a psychological trick to get you to BUY, not to save. My grocery store offers pennies off a gallon of gas if you buy certain items. I could, theoretically, manage to get a dollar off a gallon of gas every month by buying cartloads of groceries I can’t eat or shouldn’t eat…only to save $1 per gallon at one 16-gallon fill-up. Do the math. Frequent shopper is the appropriate term, not frequent saver.
Financial Tips #7
A generic tip, again, but a good one. Anyone who makes a good salary and wonders why they’re always broke should do this for at least whole month for the eye-opening truth. If you’ve already done this before the furlough, you’ll know where you can cut back or at least re-allocate your funds.
Financial Tips #8
I always roll my eyes when I see Tip #8. If I lived in a city that had public transportation, I’d be more than happy to use it. Unfortunately, it’s just not that way everywhere. I do, however, advocate telecommuting where possible to save gas/driving time, even if it’s only 1 day a week.
Financial Tips #9
Again, are you kidding me? Vacations when you’re taking a pay cut? I won’t get into the punctuation problems here, but if you’re taking a pay cut and need to pay bills, then pay the bills before you “take advantage of weekend or mid-week deals” on travel.
Financial Tips #10
I’ll agree with this one, even though it’s also a generic tip. I’ll add that during furlough season or while slogging through a pay cut, just stay out of stores (including online stores) altogether. It’s too easy to be pulled into impulse buying once you walk into the store. Just stay out of them while you’re on furlough. If you really do need that new white blouse for your best business suit because you spilled your brown bag leftovers on the old blouse and you’re briefing customers on Monday, then take cash (no credit cards or debit cards) with you into the outlet store. Watching shopping online, too–never have your credit card near your computer, tablet, or smart phone when conducting “market research” for that blouse!
This newsletter’s kind of advice is why our country and so many of its citizens have debt problems. Sometimes you can’t do more…or even the same…with less. You have to cut back.
I’m not picking on just this particular newsletter for its lame financial tips. I’m so excited when I see new tips that I expect to learn something, and I’m more often than not disappointed by what I read because financial tips tend toward less frequent pedicures and going into debt to glean tax write-offs. I’ll put out my own list later this summer, but I want to see how much I can reduce a particular bill before blog about it with any authority. Stay tuned; more financial freedom insights to come.
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