Yay, for a month with an extra payday!
When you get paid bi-weekly, every so often a month with three paydays comes along, which is just awesome!
However, if you are not intentional with where this extra money goes, it is far too easy to just to waste it by carelessly spending the money. Instead, plan to be smart about spending an extra paycheck.
So what should you do with an extra paycheck?
The first option is to put the money towards next month’s bills to help build up a buffer of one month total expenses. The goal is to have enough extra money in your account, so you pay this month’s expenses from last month’s income.
Your emergency fund would welcome the extra money, especially if you are still trying to save up your first $1,000 starter emergency fund. It is amazing how fewer emergencies pop up when you have just a $1,000 in the bank.
You can put your extra paycheck towards paying off your smallest debt. How great would that feel to get rid of one bill completely? Once you have paid off your smallest debt, roll the payment into paying off the next debt. [Tweet “How to be smart about using your third paycheck in a month! “]
Another great option is to put the money into savings for a large goal, such as a vacation or a big car repair. You could also divide up the money for several smaller purchases you have been putting off.
Putting extra money into your investment accounts is another smart move, if you are at that stage with your finances. Although, I would use the money to pay down debt before investing to eliminate the risk you carry and keep you focused on getting out of debt.[Tweet “Never leave an extra paycheck sitting in your checking account! “]
You should never leave your extra check in your checking account. The money will sprout wings and be gone before you know it. You will be very sad if this happens.
Be cautious of the temptation to go on a spending spree just because you have extra money and buy things you really don’t need. If you do need a little bit of a spending release, plan a specific amount you can use to have fun and save the rest.
My extra paycheck this month will be applied to building up a month’s reserve of cash on hand. I want to get back into the habit of paying for this month’s bills with money I earned last month. It is incredible how much less stress you have, when you already have money in your account to cover all the expenses for the month.
What are you going to do with your extra check this month?
Like this post? Check out all the rest in :
- Successful Budget Tips Series
Hi! I’m Charissa. I’m on a mission to help hardworking women overcome money struggles and gain financial peace with a Biblical perspective so they can have the freedom to impact their families and communities. Ready to make some changes that will impact your finances in 2020? Click here to get a free worksheet to help you make it happen!