You guys! I’m so freakin’ excited. Seriously, I can’t wait for Friday to get here!!!
You see, Friday is payday… and payday is always a great day, right?!? But this isn’t just any payday. It’s a super secret special payday that only comes around a few times per year. It’s the magical EXTRA payday!
Yup yup!!! If you get paid every week, and for some who get paid every two weeks, it’s time to celebrate. You’re getting an extra paycheck this month, and it lands in your hands on Friday.
How does this happen? Well, there are 5 Fridays this month. In 2017, those getting paid weekly receive an extra paycheck in March, June, September, and December. If you’re paid every two weeks, you’ll get a THIRD paycheck if the first payday of the month fell on the first Friday. For example, if you were paid on June 2nd this year, you’ll also get paid June 16th AND June 30th! BANG BISCUIT!!!
Congratulations… Now Don’t Blow It!
Congratulations! This is great news, right? If you’re trying to pay off debt, get ahead on your bills, or funding other savings goals, the timing couldn’t be better!
When I was paid every two weeks, I absolutely loved the magical extra payday. It was an additional little bonus that I didn’t even have to work for.
Here’s the deal, though: When you receive a windfall, you need to put it to good use. I know what it feels like. I’ve been there. Resist the temptation to run out and blow it on a new TV or a week full of dinners out. Use this extra paycheck to further your goals instead. Here are some ideas to help you along.
Start an Emergency Fund
Scraping together enough money to start an emergency fund can be difficult, especially if you’re struggling. Sometimes, a $1,000 beginner fund may as well seem like $1 million. Getting an extra paycheck is the perfect opportunity to jump-start this über important tool. It doesn’t require you to cut expenses. You don’t have to “find” extra money to squirrel away. Just take this extra paycheck and move it straight to your eFund. Seriously, it actually could change your financial life forever.
See Also: How to Get Ahead With an Emergency Fund
Pay Off Debt
Already got a beginner emergency fund in place? Use your extra paycheck to pay down some debt. As we explain in our book Zero Down Your Debt: Reclaim Your Income and Build a Life You’ll Love, debt is the biggest obstacle standing between you and the life of your dreams. The faster you get rid of it, the better off you’ll be. Take that extra money and chuck it straight at your debt. Again, it’s an extra paycheck so it really takes no extra effort on your part. Not only are you eliminating your debt, you’re effectively making interest on the money you pay toward it.
Get Ahead on Your Bills By a Month
If you’ve already started a zero-sum budget, you know that the ultimate goal is to get far enough ahead so that you can pay this month’s expenses using last month’s income. Using an extra paycheck to build up these reserves is another awesome option. By using last month’s income, you’ll never have to guess how much money you have available. You’ll already know because you’ve already been paid. That means you can be far more accurate with your budgeting, creating fewer mistakes and more money available to you!
See Also: How to Budget Using Last Month’s Income
Make an Extra Mortgage Payment
Another great option is putting your extra paycheck toward your mortgage. We’re big fans of paying off your mortgage early, and an extra paycheck is an easy way to get started with this approach. Prepaying your mortgage can save thousands of dollars in interest and cut years off the length of your payments. And since you’re paying off debt and saving on interest, you’re effectively creating a “guaranteed” return on your money.
Stick It In a Savings Fund
Are your finances already in good shape? Try using your extra paycheck to supersize your savings! Shove the money into a savings account, or stick it away in retirement for use at a later date. You can also put it in a college savings plan and help your kids avoid student loan debt. Or, if you’re looking for a little more adventure, use the money to stock your travel fund. (Hint: Open a separate account for your travel fund with just $25 here.)
As John Wooden once said, “Things work out best for those who make the best of how things work out.” This is a perfect opportunity to do just that.
Resist the urge to see this as “fun money,” and use it to get ahead instead. While it’s not as sexy as instant gratification, it will work out better over the long run. And trust me, a quick spending high doesn’t come close to the joy you’ll feel over a lifetime of standing on firm financial ground.
What will you be doing with your extra paycheck? Let us know in the comments below!