Looking for a way to keep your utility bills consistent every month? Learn what budget billing is and decide whether it’s right for you.Īrticles may contain information from third-parties. Keep the budgeting mindset going by turning your attention to your bills. “Then, it’d be wise to put that money, or at least a portion of it, toward that goal.”Įven though biweekly budget plans are not the same for everyone, being disciplined and proactive about the savings opportunity of a third paycheck can help you form a strong foundation for your financial future. On the other hand, he says, maybe you have a goal to retire in 10 years, but you’re off track and are now wondering how to play catch up on retirement savings. “If you have an extra paycheck and a debt-reduction goal, then maybe you apply the whole thing toward that goal,” Stous says. When you’re deciding how to budget with extra paychecks, you might find yourself going back and forth between options. There’s no one-size-fits-all trick to budgeting for 3-paycheck months If your biweekly budget helps you tackle debt repayment, you’ll start to owe less and have less interest accruing each month, freeing up even more cash from your future three-paycheck months. You might also choose to put your extra paycheck toward any student or car loans you might have. Alternatively, paying down a few low-APR, low-balance debts can help you gain momentum and bring other financial benefits. Paying off the debt with the highest APR could save you the most money because you’re paying the most to carry a balance.įor instance, if you owe close to your credit limit on a credit card, the high credit utilization-or card balance to credit limit ratio-could hurt your credit score. Make a list of all of your debts organized by balance and annual percentage rate (APR). “The first thing I usually tell my clients is to get rid of high-rate debt, which is usually credit card debt,” Deane says. Pay down debtĪs you consider how to budget an extra paycheck, start by looking at your debt. Lots of people ask themselves: How can I budget for an extra paycheck? If this is you, consider these five ideas as you budget for your three-paycheck months: 1. You could decide to give yourself some extra room in your budget throughout the year, for example, or use the extra money for something specific. Samuel Deane, a founding partner of a wealth management firm, says there isn’t one correct way for how to budget an extra paycheck because it should depend on your personal situation and financial goals. Because the extra paychecks will fall on different days every year, tracking them in advance is key. Calendar reminders can help you remember when the additional funds will arrive. Grab a calendar, write down your paydays for every month in a given year, and highlight the two extra paychecks. The first thing you need to do is to find out when each extra monthly paycheck will hit your account. Those two extra paychecks can go a long way, but without a plan in mind, they can seem to disappear as quickly as they arrived in your checking account. That means two months out of the year will be three-paycheck months, instead of your regular two. Why do we sometimes get three paychecks in one month? If you’re paid biweekly, you get 26 paychecks throughout the 52-week year.
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