I imagine many of you are like my wife and me. We get paid every two weeks. I get paid on Mondays and my wife gets paid on Wednesdays of the same week. So, that means we get 52 checks each for the entire year (combined). If you average those out per month, it is 4 checks every month except for 4 months where we get 5 checks. So, what should we do with the additional check in those months?
As it turns out, May is one of those months for us. I get an extra paycheck at the end of the month. Basically, we already spent the extra paycheck. My wife is going back for a graduate degree and we paid cash for the class that she is taking this summer. However, there are still a couple more months this year where it will happen again. Based on those facts, I came up with a few ideas of what to do with those extra paychecks. Feel free to mention some of your ideas in the comments!
Get Rid of Debt
Well, what did you expect me to say? For most of our extra paychecks, we are just going to put them on debt. It’s a great extra boost and can really help you gain some traction.
Save For Variable Expenses
We all have those variable expenses that seem to creep up on you at the wrong time. Those expenses can include car insurance, home insurance, taxes, gifts, etc. Placing your extra paychecks into a savings account specifically for those types of expenses will guarantee that they won’t surprise you when they become due.
Save For The Holidays
Have you ever wanted to pay for your Christmas gifts in all cash? Well here is your chance! Save those extra bucks specifically for this goal.
Just Spend It
This is the one that I do not recommend unless you are debt free. If you are, what’s wrong with a little splurge? How about that weekend getaway you have been dying to take? Want that new cell phone? Go and get it!
Open a Roth IRA
Use the extra cash to being (or continue) saving for retirement. The Roth IRA allows you to place after-tax money into an account that grows tax-free. That means when you retire you can take the money out and not pay a dime in taxes!
Go Back to School
This is something that my wife is doing. Her work pays for a part of it but we need to cover the costs up front. Using the extra cash to pay for the class ensures that we don’t go further into debt or rely on credit cards.
Save For a House
You could also use the extra paycheck to start a house fund. This will eventually be a goal for my wife and me but it is still a few years off. Heck, if you are debt free, you should also have a TON more money to set aside each month. We can’t wait until we get to that point!
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Of course, all of this depends on your living only on two checks per month! What else can you think of?