What to Do When Facing Financial Uncertainty

Academic and research institutions are facing federal funding cuts—both realized and potential—due to the Trump administration’s hyper-aggressive and ham-fisted attempts to reduce federal spending. Many of the graduate students, postdocs, faculty members, and researchers at these institutions are experiencing uncertainty about whether their positions will continue and how they will be funded, at least to a degree. In the face of income uncertainty, there are certain steps you can take to shore up your personal finances so that you can better weather any storm that might come.

The following are practical steps you may take to strengthen your personal financial position if you still have an income. There’s no need to take every action on this list. My intention is to help you reduce your stress at this time, not add to it.

Establish or Increase Your Emergency Fund

Evaluate whether you should increase the size of your emergency fund. An emergency fund is a sum of money specifically set aside to be drawn upon when you have a financial emergency, such as income loss or an unexpected but vital expense. This money should be kept in cash equivalents, such as a high-yield savings account, not put at any risk.

While in more stable financial times you might be able to get away with maintaining a smaller fund, right now I suggest an emergency fund size of two months of expenses if you are early in your financial journey (e.g., are holding high-interest debt) or six months of expenses if you are later in your financial journey (e.g., are debt-free aside from student loans or a mortgage and are regularly investing).

If you don’t yet have the smaller size of emergency fund set aside, please make it a top priority to create it quickly, even if it requires an uncomfortable level of sacrifice in the short term. You can free up cash flow for your emergency fund by fasting from discretionary purchases, cancelling discretionary fixed expenses, selling items you no longer use, increasing your income if possible, and attempting to reduce your expenses generally. Ask yourself what you would and would not spend on if you had no income, and spend only on what’s absolutely necessary until you reach your emergency fund goal.

Pay Off Your Credit Card Debt

If you are carrying a balance on your credit card(s), the next step after increasing your emergency fund to two months of expenses is to pay down or off your credit card debt. Like with the emergency fund, please do this as quickly as possible. Credit card debt typically accumulates interest at a very high rate, which is toxic for your finances. I don’t suggest closing any credit accounts in this process unless you are paying an annual fee for them because if worse comes to worst you might have to accumulate a balance again (see next).

Research and Prepare to Take Out (Less Toxic) Debt

Where would you turn if you lost your income and spent down your emergency fund? Especially with a smaller-sized emergency fund, that could happen before you secure another position or funding source. Taking out new debt is a possibility, even though it’s no one’s favorite option. What types of debt are accessible to you that would come with a lower interest rate than your current credit cards?

If you are a student, look into whether you’re eligible for federal or private student loans; consider submitting a Free Application for Federal Student Aid now to open up that possibility without committing yourself to taking out any debt.

If you’re a homeowner with equity in your home, compare home equity line of credit (HELOC) offers from a few lenders and consider opening one. Opening an HELOC doesn’t obligate you to borrow against your home, but once you open it, the credit is available to you. However, there are origination and possibly account fees, so don’t exercise this option without weighing the costs. Some lenders require you to have an income to take out this type of loan.

Shop around for a personal loan at a reasonable interest rate—preferably without an origination fee or a very low fee. If you want to take out this type of debt, you will have to do so while you still have an income.

Consider opening a credit card with a lower-than-average interest rate to turn to if you run out of cash. Some cards offer a 0% interest rate for a fixed period of time.

Diversify Your Income Sources

In general, I suggest the habit of applying for at least one fellowship/grant per year, and right now you should double down on that practice. Take some time this month to identify several potential funding sources; some of them should be from organizations other than the federal government. Loop your advisor/mentor in to help you decide which to apply to, and make it a priority to submit a strong, tailored application at the appropriate time.

Now is also the time to start a side hustle or job if you don’t yet have one—or to add another. You don’t necessarily have to set a goal of earning a lot of money through it right now (unless you’re trying to increase your emergency fund size or pay down credit card debt). The purpose of establishing one or more income sources outside of your primary one is to be able to quickly ramp up your income through them should you lose your primary income. For example, if you freelance and typically take one small job per month, if you needed to, you could try to attract additional clients. It’s easier to go from one client to five than to go from zero clients to one, so establish yourself now, before you need the income.

When you diversify your income sources, think about the upstream source(s) of the money you seek. At this time, it’s best to add income sources from people/companies who do not directly receive federal funding. While I typically advise graduate students and postdocs to focus their side hustle efforts within areas related to their developing expertise that could potentially advance their careers, now is the time to cast a wider net. Yes, offer your data visualization services, but maybe also do a few baby- or pet-sitting jobs to gain references.

Research Resources Available to You

What resources are available to you through your university, city, county, or state if you did lose your funding? You can research this question in advance so that you know where to turn. For example:

• Would you qualify for unemployment benefits? (Don’t assume you do as a graduate student or fellow! It varies by state.)
• Does your university offer emergency grants or loans? What is the application process?
• Where are the local food banks and when are they open? What are their eligibility criteria? (There may be one on your campus.)

If you are a student, the financial aid, basic needs, and/or financial wellness offices can help you with this research.

Prepare for a Career Pivot

While you hopefully will not suddenly lose your income, it may become clear over the coming months that your current career path is not viable or will not meet your expectations. In that case, prepare to pivot. Early steps you can take are to update your CV/resume, reconnect with and expand your network, and utilize the career and professional development resources available to you, such as through your university’s career center.

I hope that taking one or more of these steps will help to calm your nerves in this time of uncertainty. If you are able to, please advocate for the restoration/continuation of vital research funding.