What To Do With a Three Paycheck Month & How You Can Save Two Extra Checks Per Year

Before we dive in, it’s important that you know the difference between bi-weekly and bi-monthly pay schedules.

A bi-weekly pay schedule is the most common type of pay period used by employers. If you are paid this way, you’ll generally get paid on a certain day, every other week (such as every  other Friday). This means you’ll receive 26 paychecks a year and 27 during a leap year. It also means you’ll get three paychecks a month twice a year. 

A bi-monthly pay schedule, also called semi-monthly pay, means you get paid twice a month. Pay dates are typically 15 days apart and occur perhaps on the first of the month and 15th or 16th. You may also get paid on another random set of dates that are 15 to 16 days apart. With this type of pay schedule, there are 24 pay periods in a year – with no three paycheck months. 

In this story, we get into the nitty-gritty of bi-weekly pay periods, as this is what gives you an extra two paychecks a year. Read on to learn seven ways you can use your extra paycheck money wisely by planning ahead and responsibly spending and saving your hard-earned cash. 

When you get a third paycheck in a month, instead of going out and spending that cash, try using it to pay off your debt. For example, you may be able to pay down credit card balances, chip away at your medical bills or even make extra payments toward your student loans or other debts.  

Do you have an emergency fund, or money set aside in a specific account to pay for unexpected expenses, like medical bills or car repairs?

If you don’t have an emergency fund, you’re not alone. According to Bankrate’s latest Financial Security Index, about 28% of Americans have no emergency savings. 

At a minimum, many financial experts recommend you have at least three months of living expenses saved up into an emergency account. But, don’t fret. Whether you’re starting from scratch or trying to build your emergency fund, your extra two paychecks can help you meet this goal. 

Pro tip: Pretend you never saw those paychecks and auto-transfer them immediately into your emergency fund as soon as you get paid. If you’re a Chime member, this is super easy with Chime’s Automatic Savings feature. 

You probably know about the importance of saving for retirement, right?

Whether you have an employer-sponsored 401(k) plan or an individual retirement account (IRA), you can always add extra money to your account – helping you build up your fund even faster. So, perhaps consider putting your two extra yearly paychecks right into your retirement account. 

Have you been putting off home repairs or car maintenance because you’re low on cash?

Think of your three paycheck month as a great way to get these repairs taken care of, paying for them in one fell swoop. 

It’s summertime and we know you’d probably like to take a vacation. But, even if you travel on a budget, you know this means you’ll be spending money that you wouldn’t ordinarily spend.

With this in mind, wouldn’t it be nice if you had a vacation savings account, with money sitting there and ready for you to use on your next vacay? Why not open that savings account right now and deposit your extra third paycheck directly into the bank?

Without even thinking about it, you’ll be able to go on vacation without stressing about how you’ll pay for it. 

We know the holidays may seem way off in the distance. But, before you know it, Christmas will be here and you may be whipping out your credit card to pay for those presents. 

But, what if you used your extra third paychecks toward these gifts? All you have to do is deposit these paychecks into a holiday savings account or perhaps your regular savings account (just don’t spend it!) The money will be ready for you when Christmas rolls around and you can enjoy holiday shopping – without the stress! 

If you’ve been diligent in sticking to your budget, there’s nothing wrong with using a small percentage of your extra third paycheck to splurge on something you want. The operative word here is “percentage.” So, sock those two checks away and then maybe take 10-25% of this cash and treat yo’self to something you want, like dinner with friends, a manicure or a fitness workshop. You get the point. 

As you can see by the seven options here, you’ve got many ways to use your three paycheck months to make financial improvements in your life: from paying down debt, to starting an emergency fund, to leveling up your savings account, and more. 

Instead of spending those checks recklessly, you can use these three paycheck months to get closer to your financial goals. Are you ready to give it a try?