Today I heard a rumor in the office that we might be seeing a salary furlough coming within the next few months. Normally I don't pay much attention to the rumor mill, but this rumor has some credibility to it.

  • This is a state office, in a state that has been behind budget for months
  • This state has furloughed employees before - and the return of their missing salary weeks took 2 years to occur
  • This rumor comes from a person who is our union rep.

Considering the possibility, I want to be prepared in case this comes to pass. I have about a month's worth of income in my savings, about $8000 set aside in an investment account, and about $18,000 set aside in a deferred compensation retirement account.

I'm considering reviewing any subscription services that we don't use frequently for cancellation - which I was going to do anyway as a matter of course - but are there any other steps I should take or prepare for if and when this furlough occurs?

1 Answer 1


Here are some options to consider in advance of hearing anything more concrete.

(1) Create a career backup plan for yourself - a furlough can be a signal of future layoffs, and in order to put your mind at ease as the rumour mill spits this out as a further possibility, you will want your resume up to date and a plan of action for job hunting.

(2) Look at your emergency sources of cash you can create for yourself. You have identified investment accounts and deferred retirement accounts, but what other sources of short term cash do you have available? Can you sell a car or similar assets that might tied you over for an extra month or two?

(3) Can you downsize your accommodations, without incurring penalties? Now would be a bad time to re-sign a year-long lease on an apartment, for example. If you own your home and don't want to take the more extreme step of selling, consider whether you could take on roommates, potentially short-term through something like Airbnb (not a great option during Covid, admittedly).

(4) You mention cancelling subscription services, but have you reviewed your total expenses during the month? Can you cut back on any type of expenses for the length of time you expect the furlough may exist?

(5) Do you have access to low-rate debt? ie: not credit cards, but maybe a Home Equity Line of Credit, or similar? This should be a last resort but you will want to be aware of your options before you decide to liquidate your tax-deferred retirement accounts.

  • "This would be a bad time to re-sign a year-long lease on an apartment" - Ah, the thing I did at the end of last month. Excellent.
    – Zibbobz
    Oct 29, 2020 at 21:11

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