Half of workers on paycheck-to-paycheck treadmill

CHICAGO (9/17/08)--Nearly half of workers (47%) say they're living paycheck to paycheck just to make ends meet, up from 43% last year, according to a recent survey (CareerBuilder.com Sept. 3).

The savings situation doesn't look any better. The Harris Interactive survey, conducted on behalf of CareerBuilder.com, the nation's largest online job site, also found that one out of four workers isn't putting any money into savings each month, and one out of three workers doesn't participate in a 401(k), Individual Retirement Account (IRA), or other retirement plan.

Make the most of your hard-earned paycheck:

Live within your means. To do that, develop a spending plan (budget) and track where your money goes. If you're spending more than you make, adjust your spending plan by cutting back or cutting out spending leaks.

Save your raise. If you get a 3% cost-of-living raise, allocate the extra income to savings. Then when you get your next raise, increase your disposable income by the amount of your last raise.

Save that extra paycheck. A few times throughout the year you may get an extra paycheck during the month. Allocate it to savings or to your emergency fund for a little cushion when times are tough.

Don't miss out on employer benefits. Take full advantage of pre-tax spending programs offered by your employer, and make sure you're getting at least the employer match on your 401(k). Sign up for flexible spending accounts, direct deposit, and retirement accounts.

Change your tax withholding. Don't give Uncle Sam an interest-free loan, especially if your budget is stretched too thin. Adjust your withholding so you have more cash in your paycheck now. Strive to match your tax payments with your actual tax liability (CNNMoney.com April 3). To use the Internal Revenue Service (IRS) withholding calculator, visit IRS.gov and type "withholding calculator" in the search box.

Work overtime. If the opportunity exists, put in some extra hours or work an extra shift once or twice a month to pad your paycheck.

For more information, read "Tough Times Series: Payday Borrowing Pokes a Hole in Your Pocket" in Home & Family Resource Center.

courtesy of cuna.org