How to Take Full Advantage of Extra-Paycheck Months?

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For those who are paid on a biweekly basis, many of us look ahead on the calendar to see which months of the year will give us the privilege of an extra paycheck. Usually occurring twice per year, three-paycheck months provide extra income that is useful for saving, paying off debts, advancing bill payments, and even using for personal spending. It’s important not to squander away a full extra paycheck on frivolities, however. BMG Money encourages its customers to make smart choices with their income, so take our advice and use your extra paychecks to work toward establishing a stronger, more secure financial future.

How Do I Make My Extra Paycheck Useful?

In order to take advantage of a three paycheck month, your monthly budgeting must already be established to rely on only your first two paychecks. This way, in a three-paycheck month, the third paycheck will always seem like a bonus. This money can make a significant impact on your finances as the entire paycheck can be strategically distributed among your budgeting categories or any outlying balances. When budgeting, do not fall into the trap of overspending and expecting that your extra paychecks will always be there to bail yourself out. Instead, use the extra paycheck toward getting ahead. You should use this money for building your savings, paying off debts, and taking control of your bills. The following suggestions for three-paycheck months can help you better manage your personal finances.


Whenever you receive an extra large sum of money, it is always important to take at least some of it and add it too a long-term savings account. If you do not have a savings account, your extra paycheck is the perfect chance to start one. For those that already make contributions to a savings account every payday, use a similar strategy with your extra paycheck and deposit at least 30 percent of the money into savings. Doing this twice per year will add extra padding to your account. Furthermore, accounts with interest will increase much faster in value over the years.

Pay Debts

Especially when you are carrying higher debts, it’s important to consider the impact that making an extra payment twice per year will have on a student loan, a mortgage, a car payment, and other personal debts. It may seem that placing a fraction of your extra paycheck on debt relief is really not going to make any major difference on your total balance. However, committing to paying down these debts with your extra income can shave months if not years off of long-term debts. If you are close enough to fully paying off one of your monthly debt payments, it may even be more helpful to go all in and use the paycheck money to eliminate that balance completely.

Get Ahead on Other Bills

Another strategy for taking advantage of your extra paycheck, especially if you do not have any debt payments, is to make advance payments on your monthly bills. Making a payment ahead of time for even just one or two monthly bills will help you feel in control of your cash output. Some monthly payments like car insurance, for instance, can even be paid quarterly or every six months, sometimes at a discounted price. By using your extra paycheck to get ahead on some of your bill payments, you will gain additional financial wiggle room in upcoming months.

Do Something Nice for Yourself

While it’s important not to blow all of your extra paycheck on an unnecessary personal expense, you have to remember that this is your money that you have worked hard to earn. As such, you should dedicate a small portion of the extra funds to yourself as well. If you’ve already saved, paid off debts, or paid your other bills, you are allowed to reward yourself. Depending on how much of the money is left, you could place the remaining funds in a vacation account or even take a short day trip to somewhere new. Buying new clothing, new household items, or even just pocketing some of the extra cash for small purchases should serve as the perfect reward for responsibly managing your income.

To review, in order to make extra paycheck months work for you, you must already have your budget reliant on strictly two paychecks each month. Do not squander all of the money, but instead make responsible decisions to help you eliminate debt, get ahead on bills, and save. If you have not been mindful of three-paycheck months before, now’s the time to get started. You will be surprised by how much relief this extra financial boost can do for your personal finances each year.