How to Adjust Your Budget if the Payroll Tax Cut Isn't Extended

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NEW YORK ( MainStreet) -- The payroll tax cut extension is set to expire at the end of this month unless Congress can agree on a plan to renew it for the remainder of the year -- something looking increasingly unlikely.

While the Obama administration and many in Congress agree the tax cut is worth the $100 billion or more it would cost the government to extend it, legislators are split on how to fund it. Unfortunately, without an extension, many Americans may soon be struggling with their monthly budgets.

Here are a few ways to adapt to the possible reduction in take-home pay.

Just how much a person saves with the tax cut depends on one's income, but the typical family earning $50,000 a year pockets an extra $80 each month from money that would otherwise go toward Social Security and Medicare taxes. As one woman noted in December before the latest extension, that extra money is "the difference between having food on the table the next week and not."

If Congress fails to approve the payroll tax cut extension, here are a few expenses you can cut out of your budget to adjust to what will essentially feel like a pay cut in your salary this year.

Rethink cable TV
The average monthly cable bill has more than tripled in the past 10 years, from $40 in 2001 to $128 in 2011. Even in the best of times, that's a lot of money to fork over each month, especially when you consider the incredible selection of TV shows available online through sites such as Netflix(NFLX) and Amazon(AMZN) , whose combined cost would be about $30 more for an entire year than what Americans pay on average for a single month of cable access.

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Bring your lunch to work
It might sound like a small change, but one recent survey found that workers spend $2,000 a year buying $5 to $10 lunches every day at work. A better option is to prepare your own meals at home the night before, which should cut down on much of the cost. If it feels like a big lifestyle change, try making the switch for one or two days a week and work your way up to doing it every day.

Cut out your vices
Even if Congress does approve the payroll tax cut, it's always a good idea to cut out (or cut down on) some of your vices, but this is especially true when money is tight. As we have reported , the cost of cigarettes and alcohol adds up quickly. If you spend just $15 a week on drinks (which in New York barely gets you two beers) you'll end up spending nearly $800 for the year. So if you really need to cut costs, either give up the vice entirely or in the case of something like alcohol, try mixing your own drinks at home on the cheap.