Manipulate Your Paycheck to Stretch Your Dollar

Times are tough. We all want an extra dollar here and there. The good news is, we have a tool available for us to do just that.

In your paystub, the section where it says Fed w/h can be changed at any time. By using an IRS form, form W4, you can claim allowances. This means that the higher your allowances, the less taxes you pay now and you end up with a bigger check today. If you can only claim yourself and no one else, the maximum you can claim is 2. But you can put more claims under the other section.

Keep in mind that the more you claim, the less taxes you're paying. At the end of the year, you might end up owing money to the government. This is not entirely bad considering that you, not the government, used your money throughout the year. Just remember that if you are getting a tax refund, the government is giving you back money that you overpaid them, WITHOUT INTEREST. In effect, you have given the government an interest-free loan!

Whatever you do now with the extra money is your business. I'll write next time how you can save money by adjusting your withholding but end up with almost the same exact paycheck.