How to make the most of two paychecks.

Do you ever feel that even though you have two paychecks in the family. you're not getting ahead? Your suspicions may be right. Recent studies have found that more than half of a second paycheck may go to the very act of earning that paycheck--child care, transportation, clothes, meals. taxes, etc. Nevertheless, there are ways to make the most of two paychecks, according to the Institute of Certified Financial Planners, Denver, Colo.

Is it worth it? First, be sure the second paycheck is carrying its own weight Most second incomes pay off, but if child care and other additional expenses are eating up the second paycheck, it may not be financially worthwhile to continue in the job. On the other hand, a second job may lead to a better-paying one, could be psychologically rewarding, or might be a form of security in the event of a divorce or the death of the other wage earner. Moreover, don't overlook indirect benefits. Take-home pay may not be much, but the job might provide valuable health insurance, retirement coverage, and other employer-sponsored after-tax savings programs.

Clarify your goals and budgeting. Decide how each paycheck file into the budget. On you want to pool both into a single checking account, out of which all expenses will be paid? Or should each wage earner contribute a portion of his or her check to a joint account but keep some in a separate personal account that can be spent as seen fit? Will household expenses be shared in proportion to the size of one's income? Should one paycheck be used to pay the bills and the second directed toward big-budget items such as retirement, vacations, or a college fund for the children?

This budgetary process works better if both parties participate in paying the bills and making financial decisions One reason two paychecks don't seem to stretch as far as people feel they should is that, as income rises, spending often increases faster. A budget can keep things reined in.

Coordinate benefits. If both of you have !health plans c one might be much better than the other One worker may be able to his or her coverage in exchange for other benefits the employer may offer. Or the employee may...