Personal Finance

How to Prepare for the Next Government Shutdown

20 November 2025

Although government shutdowns are a semi-recurring feature of American government, the most recent closure was the longest on record at 43 days — and left many feeling anxious.

In just the second week of the closure, 41% of American adults reported reducing spending, 29% said they were delaying major purchases and 21% were dipping into savings to cover expenses due to the shutdown, according to a poll from GoDaddy and HarrisX.

“This is certainly nothing new, but I think what happened with this one was, in a very strange way, kind of a good reminder that sometimes they can go on for longer,” says Melissa Caro, a certified financial planner based in New York City and founder of the digital platform My Retirement Network.

If you were directly affected by the shutdown, there are practical steps you can take to be better prepared in the future. And even if you weren’t, these are smart financial habits worth considering.

Experts typically recommend that everyone have a savings cushion available for unexpected costs. If your income would be affected by a government shutdown, however, an emergency fund is even more crucial.

“We encourage and counsel clients to have six to nine months of ready cash,” says Jay Spector, a CFP with EverVest Financial in Scottsdale, Arizona.

If you’re not there yet, set up an automatic transfer from your paycheck on paydays to help build your cash base. In fact, Spector recommends making emergency savings a line item in your budget.

“It should be next to your haircuts, your grocery bill, your vet bill,” Spector says. “Pay yourself first before you pay anybody else.”

If you’re a government employee, Caro recommends setting aside a separate shutdown fund, because your situation is more directly tied to what happens at the federal level.

“If you are a federal employee or contractor, sadly this is part of your reality now,” Caro says.

An emergency fund is ideal, but if it’s not possible or you haven’t saved enough yet, consider applying for a home equity line of credit as a safety net, says Byrke Sestok, a CFP with Moneco Advisors in Harrison, New York.

“It works like a credit card, where if you don’t use it, you don’t really have much cost,” Sestok says.

That said, using your home as collateral is a risk, so if you spend against your equity, make sure you have a plan to pay that back once you’re over your financial hump.

Additionally, it’s not a bad idea to have a backup credit card, should you really need to cover a cost. Just proceed with caution — the credit card is a last resort, not a first line of defense.

“We certainly don’t want to use that debt if we don’t have to, because the interest rate will be significantly higher,” Sestok says.

Take action immediately if a shutdown occurs

When the most recent shutdown started, some people who were impacted probably didn’t tweak their spending habits right away because they didn’t think it would last long.

“I’m willing to guess that the first three days or so of the shutdown, no one was going into immediate budget mode,” Caro says. “This one was such an important lesson because it lasted longer than anyone expected.”

In the future, if your income depends on the government, let a government shutdown be your signal to pare back ASAP. Suspend your streaming subscriptions, stop eating out, pause extra debt payments and trim your non-essential spending.

“If you’re a habitual Door Dasher for food, you might want to cut that out and start grilling steaks and burgers at your house instead,” Spector says.

Rethink holiday spending habits

This latest government shutdown eased midway through November, and the next funding vote is due by January 30.

Translation: This might not be the year to go big on the holidays. Spend mindfully, and consider talking to friends and family members about going a little smaller on gifts if needed.

“This year, more than ever, I beg people to have a budget,” Caro says.

And within that holiday budget, keep in mind that you’re not just buying gifts — you might also be hosting gatherings, buying and mailing cards, giving end-of-year tips or picking up new decor, among other things.

“I am the first person to admit that every store I go into now, I’m like, ‘Oh, look at that pretty sparkling angel that I don’t need,’” Caro says. “A lot of this is just being aware of your spending and trying to tone it down.”

Plan ahead for bureaucratic delays

If you’ve got business to do with the government — applying for Social Security, Medicare, or a loan from the Small Business Administration, for instance — don’t dilly dally, especially as the date for a potential shutdown looms.

“I would not sit back waiting for things to happen,” Spector says. “You need to have your paperwork in and go through that process.”

That’s because even though basic government functions continued during the shutdown, the processing of new applications for services slowed dramatically. “It’ll hit a roadblock as soon as the government is shut down again,” Spector says.

Preparing for a government shutdown isn’t all that different from preparing for any financial disruption: Have a cash cushion, consider credit options for emergencies, trim unnecessary spending and keep up with routine paperwork. If a shutdown would affect you directly, it’s especially important to get these things squared away.

And if the shutdown ends quickly, you may not need to use any of your contingency plans, Caro says. “But if it doesn’t, you are ahead.”