Do You Have Extra Paychecks?

by Miriam Caldwell | More from this Blogger

02 Dec 2006 10:41 PM

How often are you paid? If you are paid biweekly then you actually receive twenty-six paychecks a year. If you create your monthly budget on two paychecks a month, you receive two extra paychecks a year. If you are paid weekly you will receive fifty-two. However if you can create your monthly budget on four paychecks a month then you will have four extra paychecks a year. These extra paychecks can really be used to your advantage. If you do not include them in your budget then it is extra money that you can use however you wish. Here are five things to do with your paychecks.

1) You can put them directly into your savings account. Since you do not need the money to meet your expenses this is really easy to do. You should not feel like you are missing any money, and you are allowing it to grow to your advantage.

2) You can use the paychecks to pay off existing debt. This will help to speed up your debt snowball. It can be very satisfying to watch your debt disappear at quicker rate then you planned.

3) You can plan on saving the checks specifically for one category that you do not have room to cover in your normal budget. This could include Christmas, vacations, or a down payment for house. If you are really focused on the debt snowball these categories may be neglected in order to help you reach your goal.

4) You may want to donate part or all of the money to charity. It is always nice to help others. Again this is money you haven't planned on using, so you will not miss the money.

5) You may choose to use some of the money as blow money. You can go out to a nice restaurant or buy that one item you have been waiting on. It is important to allow yourself some fun along the way. This will help you to stay focused when you need to.

Related Articles:

The Importance of an Annual Budget Five Reasons to Save Money Are You Living Withing Your Income?

Learn more about Miriam Caldwell

Miriam is a SAHM mom of three children. She has a daughter who is seven, and two sons, four and two. She loves being a parent and spending time with her children.

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Nola Redd (7081) 03 Dec 2006 01:46 PM

The problem with 'extra' paychecks when you are paid biweekly is that your whole payment schedule shifts and it takes awhile for the 'extra' money to show up. We pay our bills when each paycheck is deposited, and so if we don't use a check or regard it as 'extra' something winds up being paid late. My dh has a hard time understanding the 'problem' - that the mortgage company and utilities are billed the same day of the month, regardless of when our check comes in. This has caused us more than one money fight because, until we sat down and talked over every bill and paycheck at the start of the month, he thought we were 'losing' money somewhere if the extra check didn't stay in our account.

Miriam Caldwell (8030) 04 Dec 2006 07:12 PM

The trick to making your extra paycheck work is to plan your monthly budget on two paychecks. You might not get the extra money for a month or two after that extra pay period in the month--it takes awhile to catch up with itself. When my dh was paid weekly we did this with his fifth paychecks. It was a nice easy way to save.