Extra Paycheck Months: What to Do With Them

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If you are paid biweekly, there are 2 extra paycheck months every year that you work. Many people think this means they should spend all of that extra paycheck money they didn’t even know they had. That is one route. Another route is to be smart with your money and invest a portion of it.

I’m not saying don’t spend the extra paycheck, I’m saying there are ways that you can use the extra paycheck to be smart with your money and set your future up for success. For me, the extra paycheck months are July 2022 and December 2022.

These bonus paycheck months are one to take advantage of. Not to squander and live a life like everyone else is living. The diligent ones do smart things with their bonus paycheck months That way, their entire future is taken care of.

That doesn’t mean they deprive themselves of happiness by not spending money they earned. But it does mean that they do smart things with their money to protect their future and family down the road. No millionaire ever got there because they spent all their money away.

The rich and wealthy got there because they invested their money while others were unwilling to do so. Extra paycheck months can turbocharge your way to money success faster than any other bonus you receive. It’s a time to spend but it’s also a time to take advantage as well.

What to do With Your Extra Paycheck:

One thing to do with your extra paycheck is to SMASH that social share button and post to your favorite social media! Many people aren’t even aware that there are additional paycheck months in the first place. Therefore, the more people who know about them, the better.

So with that said, let’s go over what to do with that extra money that you earned!

1) Pay Down Debt

If you have any consumer debt paying above 5%, then it’s time to use the extra paycheck to pay it down. This is without exception. By paying down higher interest debt, you are freeing up your cash flow for your subsequent paychecks. The person who pays their debt off gets a raise.

Their interest payments gets lower and lower every time they pay off their debt. US Credit Card debt hit an all time high of $930B, a staggering figure. More and more Americans are cash strapped than ever because of the high living costs eating away at them.

Even a $500 contribution towards your debt means a lot when done consistently over the long term. Not owing any money to anybody means the world. It feels amazing. Debt is one of the biggest destroyers of wealth. Using a bonus paycheck to free yourself from the shackles of someone else is a smart decision.

2) Retirement Savings

Extra paycheck to set yourself up for retirement
Your future matters and comes sooner than you think.

Now’s a good time as any to pad up your Roth IRA accounts. The good news is that contribution limits are even higher in 2023 than 2022 because the limits are generally tied to inflation. The biggest mistake I’ve ever made in my entire life is not contributing to a Roth IRA as soon as I made money.

I could’ve contributed towards a Roth IRA the second I earned money from the now failed Sears! The Roth IRA would have grown to huge amounts, just 10 years later, due to compound interest.

I maxed out my 401k consistently over the years as soon as I could. However, I never contributed to a Roth IRA until 2021. That was my biggest financial regret I’ve ever had in my entire life. Sure, my retirement will be just fine because of my 401k.

However, having more money for retirement doesn’t hurt.

An extra paycheck can definitely be used to contribute towards a tax advantaged account such as the Roth IRA. Even if you decide to change your mind, you can always withdraw that cash if you ever need the liquidity.

That’s how powerful a bonus paycheck is. You can contribute towards a retirement account that is just as good as cash.

3) Open a New Bank Account

Banks are still giving out great signing bonuses. Some banks are offering a $200 bonus just for signing up and connecting your direct deposit with the bank. The signup bonuses can’t be ignored and you may enjoy a good bonus just with one extra paycheck.

Some banks don’t even require a minimum deposit limit to sign up. And on top of which, savings accounts have been paying good yields on their accounts ever since the Fed raised interest rates starting in 2022. There are rates as high as 2%, which is unheard of for a risk-free rate.

Times are always going to be changing with the Fed’s actions and adapting to changing circumstances is a good way to go. It’s even estimated it’s going to yield even higher due to the Fed’s actions. Extra paycheck months can be fully taken advantage of.

Using money to make more money isn’t a bad decision. It’s time to take advantage with the changing economic landscape.

4) Treat Yourself

Extra paycheck month to treat yourself.
There’s nothing wrong with treating yourself with your hard earned money.

Then finally, after you’ve taken care of your future, you can take care of yourself by spending the money that you earned. You can treat yourself to a nice dinner or a nice computer that you’ve always been wanting. Whatever the case is, you certainly earned it.

Extra paychecks are good to treat yourself every once in a while. We work to live, not live to work and life is not all about getting ahead financially. Sometimes, it just feels nice to enjoy everything that you’ve built for yourself and take it easy.

What’s the point of having a lot of money if you’re not even going to spend a small sliver of it? There are some brand new computers that I’m eyeing for the upcoming year. I’m finally getting to replace my MacBook I’ve had for close to 10 years. I cannot wait!

The reward of spending money that you earned feels so sweet sweet because we worked hard for them.

Extra Paycheck Months in 2022

If your first paycheck was in Friday January 7th, then the extra paycheck months are in April and September.

If your first paycheck was in Friday January 14th, then the extra paycheck months are in July and December.

Extra Paycheck Months in 2023

If your first paycheck was in Friday January 6th, then the extra paycheck months are in March and September.

If your first paycheck was in Friday January 13th, then the extra paycheck months are in June and December.

Extra Paycheck Months in 2024

If your first paycheck was in Friday January 5th, then the extra paycheck months are in March and August.

If your first paycheck was in Friday January 12th, then the extra paycheck months are in May and November.

Extra Paychecks are Used to Get Ahead

There are too many people who don’t purposefully spend their extra paychecks wisely. It’s completely OK to spend 100% of the bonus paycheck on things you enjoy instead of investing the money. However, many people choose to spend yet wonder where the money went at the end of the month.

It’s about being purposeful with your spending that matters and less about investing your money to set your future self up for success. I personally intentionally invest every single one of my extra paychecks and put it in the S&P 500.

Buying things do not interest me because I have everything I need already.

I even tack on money onto my emergency fund accounts because I have no idea just how much worse the bear market of 2022 will get. If the market recovers, I will be completely happy at the thought of dodging a crisis. If the market doesn’t, then I will be protected.

Money protection is what I’m looking for in 2022 instead of trying to make the most money ever possible. There are many ways for you to use the extra paycheck that will get you ahead than where you are today.

Whether it’s to spend it on things you want to, investing the money, or saving it, there’s options. The worst choice you can do is to not be intentional with how you’re spending the money. I celebrate and cherish any time that more money that I wasn’t expecting ends up in my wallet.

Extra paycheck days are some of my favorite days in order to build wealth and get ahead.

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2 Replies to “Extra Paycheck Months: What to Do With Them”

  1. I worked for a company that ran payroll weekly. Similarly, I loved those 5 Friday months so I could put money away. Easy way to get in the habit of saving money.

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