For most of my working life, I have been paid bi-weekly on Fridays. With that comes twice a year when I get 3 paychecks in a month! WOOHHOO!!!
And for me, June is going to be one of those months! Time to make it rain with all that extra cash, right?!?!?!
But sadly, it’s not extra money, even though it sure feels like it during those months – what it feels like –> same number of bills with more income coming in.
Nerd time! hee hee
The reason for the 3 paychecks twice a year is because of when you are getting paid bi-weekly, you are being paid 26 times in a 12 month period. And when you do that math, it equates to 2.16 times a month…..which um….doesn’t happen. Those 0.16 don’t just fall off and fail to exist – they slowly add up to an extra paycheck about every 6 months. Also with each month having different numbers of days (28, 30, 31 days), that too will also play a factor as to what month that extra paycheck will fall. (5 Fridays in a month are always the best!) ;o)
No, I’m not trying to suck all the awesomeness out of having a 3rd paycheck occurring. I will be honest, I look forward to them too! I get to be extra nerdy and my accounting brain gets geeked! 🙂 What I do with them may be different than what most do with it, though. I’m sure most people will buy something they have been eyeing, pay down debt, or stock up of groceries, etc.
Here is an example of what I do. =D
I created an example of my plan for June instead of trying to spell it all out in words. LOL NERD ALERT!! I get to use Excel! YESSSsssss! (Kindly over look my typ-o below.)
Why I do it this way:
1. I have always liked to try to save the extra paycheck since my budget each month is based on 2 paychecks. I do allot for my bills I pay weekly and bi-weekly. Plus its easier for me to save money when I set up the amount automatically to save….for other reasons. :o/ (A topic for a different day.)
2. There are 5 Sundays before I get paid in July so I have to cover the extra week’s donation with June’s income. Also my bi-weekly bills come out of each paycheck – automatically so there will be an extra transfer to cover. This is the main reason I don’t save the whole 3rd paycheck amount.
3. I also have learned over the years to spread out the extra savings because of how my bills hit during the month. I use to try to save all of the last one but it wasn’t as easy and then I was going 4 weeks of not having money in the checking account. Splitting it up in 3rds, made the $762 easier to save and more durable. Also it will keep me in check when paying bills, and not thinking I have extra money in my checking account when it was already earmarked.
4. I have also learned over the years of doing this, to now set up these 3 payments as online transfers so I don’t accidentally forget to transfer the money and then try to back track after spending money I wasn’t suppose to spend. (I have the system running smoothly now.)
If you are interested in saving your 3rd paycheck how I do, you can do it too! It may take a little practice but after a few times, it will be like riding a bike, while watching your saving grow throughout the year. 🙂
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