Have you noticed if your paycheck is larger?Congress recently extended the payroll tax cut, so millions of Americans will continue to receive a fatter paycheck. However, a recent National Foundation for Credit Counseling (NFCC) poll revealed that 66 percent of workers did not realize that their paychecks were larger, in spite of the 2 percent payroll tax cut having been in place for more than a year.r.
Congress recently extended the payroll tax cut, so millions of Americans will continue to receive a fatter paycheck. However, a recent National Foundation for Credit Counseling (NFCC) poll revealed that 66 percent of workers did not realize that their paychecks were larger, in spite of the 2 percent payroll tax cut having been in place for more than a year.
For example, a worker making $50,000 per year will realize an additional $1,000 in their paychecks over the course of the year. But this money will only be put to good use if they’re aware it is there and use the opportunity to make a difference in their financial picture.
“These poll results underscore the need for increased financial literacy among working Americans,” said Geoff Bullock, financial educator for LSS Financial Counseling Service.
Employers have a unique opportunity to exercise corporate responsibility by offering financial education to their employees, starting with a solid understanding of how the payroll tax cut monies can be put to good use. Additional topics such as budgeting on reduced income, building a good credit score, debt reduction, and identity theft prevention, all are high-interest topics for “lunch-and-learn” workshops or ongoing classes – for a healthier workforce.
“We want to challenge businesses to act upon this opportunity that offers advantages not only for the employee, but also for the employer,” Bullock added. Proving financial education in the workplace:
· Positions the employer as a trusted resource for financial information
· Demonstrates that the employer is concerned about the employee’s financial well-being
· Creates more financially stable employees who are not distracted by financial concerns including collection calls while at work or the need to continually request advances from their paycheck
· Provides an opportunity to educate the employee on the benefits of contributing to the employee retirement plan, something they may not have previously been able to do
“Debt is often the main stumbling block standing between an employee and financial stability,” Bullock explained. “A financial education workshop is the ideal place to illustrate how applying the payroll tax cut money toward debt repayment can help regain control of finances.”
With a statewide team of certified financial counselors, LSS Financial Counseling Service is well-equipped to provide financial education at the worksite. To schedule a workshop with the office closest to you, call LSS at 888-577-2227, or go online to www.lssmn.org/FinancialEd.
The actual results of the NFCC poll were as follows:
With the 2011 two percentage point payroll tax cut, last year I:
Saved most of it – 3 percent
Caught up on past-due bills – 8 percent
Increased my retirement contributions - 4 percent
Treated myself to something special - 1 percent
Used it to pay off debt - 18 percent
Didn't realize my paycheck was larger - 66 percent