There are many advantages to doing a monthly budget. One surprising advantage we discovered was that two months out of every year we received an “extra” paycheck. If you don’t believe me, read on and I will teach you how to get your own “extra” checks!
I receive a paycheck every two weeks from my employer. Our monthly budget is based on me receiving two paychecks a month. Since there are 52 weeks in a year, and I get paid every other week, I receive 26 paychecks over the course of a 12 month period.
As you can see, our yearly household budget is actually based on receiving only 24 paychecks (2 per month). Because there are not exactly 4 weeks in each month there will be some months in which you will get an extra check. When you begin thinking in terms of your monthly budget, the extra checks truly seem “magical”.
If you are paid bi-weekly like myself, calculating which months you will receive an extra check is easy. Grab a calendar and find the months where you get paid on either the first, second, or third day of the month. These are the months that you will get 3 pay checks!
The trick in all of this is to actually do something worthwhile with the extra funds. The best thing to do is pay down any outstanding debt, invest it in a Traditional or Roth, IRA, or apply it to your vehicle replacement fund. Even better, use it to vacation in the State of Maine! Our economy could use your magical checks!
Too Much Debt? Download our free Trees Full of Money Debt Snowball Calculator and see how quickly you can pay off your debt.