Working Through the Recession

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My company has been hit by the current recession, just as I imagine yours has been. What this means for me personally is a 20% pay cut and 50% less resources (coworkers) to get my job done. My dilemma? I need to try and stick it out at my job because it provides me enough flexibility to juggle my family, too.

So if you’re at a job and feeling the hit of the recession with no good way out – what can you do to pinch pennies?

5 Ways to Stretch Your Paycheck

1. Reduce your Federal Withholding. Tax reform in the past months has reduced it already, but if you received a refund this year, there’s a good chance you can reduce your withholding even further to get more in your paycheck now.  That bonus is nice at the beginning of the year, but it won’t do you any good if you can’t get groceries on the table! If you have questions on how to calculate the amount of tax you should withhold (and how much will be withheld based on your exemptions) talk to your HR department or gather your pay stubs thus far and try the exemption calculator on the IRS.gov website.
2. Update the Brown Bag. I’m not talking about a makeover, I’m talking concept. Instead of bringing peanut butter and jelly or leftover dinner for lunch and eating it alone, in your cube, after fighting for a few minutes in the microwave, why not get together with a few coworkers a few times a week to exchange lunches or even just conversation? Maybe even get a group together to do a little cooking. If everyone cooks a weeks worth of meals and you do an exchange, everyone gets a good variety for a great price!
3. Take advantage of FSA (what is FSA?) and Dependent Care accounts.  If you have ongoing open enrollment, or your HR admin is willing to work out a deal for you, make sure you are taking advantage of these! That dependent care account, even if you put just $20/month into it, can make a great non-taxable bonus for your childcare provider at the end of the year. If you have medical expenses (even co-pays!) an FSA account (and FSA debit card) can be incredibly handy. Your contributions are non-taxable and you won’t have to remember to have $25 handy for the receptionist at that next emergency pediatrician appointment.
4. Use an online budgeting/finance software, such as Mint.com or Quicken Online. These services will connect to your online banking service (and your loans, credit cards, savings accounts – everything!) to track how you are spending and whether you are staying within your goals. You can even get low balance alerts and weekly spending summaries. The best way to stretch that dollar is to know where it is going.
5. Try working remotely one day a week. You don’t necessarily have to keep the kids at home, though, if you can (and keep from paying for daycare that day) go for it! In these times, employers are looking to save, too, so when you bring it up make sure you have a few benefits for your company included as well.  For example, at my company, I would say that working from home one day a week will enable me to complete administrative work without being interrupted by other coworkers. It will also allow me to work for a larger part of the day, since my commute time will be none, so that I will be more readily available to employees and customers in the West Coast and Midwest.  Finally, I would point out that I have all the necessary tools to work from home.

If you are able to adopt one, or five, of these suggestions (or if you already do!) let me know how you make it work in the comments. Do you have a brown bag strategy? Have you already reduced your federal withholding? Spill it!

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