Where are all my bi-weekly paycheck people at? If you pick up a paycheck every other week–or every week–then you know that there are months where you’ll land an “extra” paycheck. For me, one of those months happens to be September this year. While my monthly budget is structured based on two of my husband’s paychecks and two of mine, this particular month will actually net me three checks. Whenever I realize this and the initial excitement settles, the real question always becomes, What should I do with it?
Pay Down Debt – Nothing makes my heart go pitter patter quite like making an extra mortgage payment. Très romantique, non? Currently, we make at least a double payment every month. I also toss much of my side hustle money at our mortgage, though that can fluctuate greatly. Our biggest mortgage payment victory happened during my last triple paycheck month, and it led to us paying 3.5 times our mortgage and an epic happy dance around my laptop. While I know it’s hotly debated, paying down my mortgage early saves me the interest. And when you start with a $200k mortgage, that 3.5% is a heart-stopping number.
Invest It – Alright. I’m wading through the investment waters a bit now. I’m still wearing three life jackets and water wings while nervously eyeing the exit, but I’m in the pool, gosh darn it! We plan to max out our Roth IRAs again this year, so this might be a great opportunity to do so. I could also take some of that money and put it in our taxable Vanguard savings account.
Save It – Our emergency fund is pristine (knocks on wood, pours holy water on the furnace, avoids black cats). If that does take another hit between now and extra paycheck day, I would definitely top it off. There’s nothing quite like the peace of mind that comes from knowing you are ready–at least financially–for most things that life throws at you.
Plan Ahead – Instead of thinking of this as saving, I would categorize this as earmarked spending. Though we’ve worked hard to cut back on gifts, we do still exchange Christmas presents with a handful of family and friends. Plus, there are birthdays and other special occasions on the horizon. While we’re seriously working on cutting back our clutter, we do enjoy being able to treat our folks to a nice dinner or take our nephews out for ice cream. We could also set aside some money in our
travel fund actually go see a volcano fund.
Give a Little (or A Lot) – Charitable giving is a line item in our monthly budget. I feel very strongly about giving now and as regularly as we can. If I worked for a company that matched lump sum donations, I would be inclined to donate differently. Still, with the prospect of an extra paycheck on the horizon, I will sign up for bi-weekly deductions from my paychecks to help fund our breakfast program. Talk about reaping the benefits of kindness right away!
Splurge – I know, I know. As the former reigning queen of mindless consumption, what am I thinking putting this on the list? In days gone by, I would spend every extra dollar I made. I would never spend more than I made. I would even pay myself first. But if there was anything leftover in my checking account, you had better believe there were sale racks to scour and shoes to buy. I’ve undone that habit, but I’m still a firm believer in treating yourself on occasion. While I wouldn’t spend my entire paycheck given the five other options I have, I could easily see a sushi dinner in my future. Especially if we use a coupon.
So Tell Me…What do you do with your extra paychecks?