Image Courtesy: Dan4th

I usually start working on my budget for the coming month in the last few days of the previous month. While working on my budget for July, I realized it's going to be a nice month for my savings account.

I am paid bi-weekly and two months of every year, I am paid three times per month instead of the usual twice a month paycheck.

Back when I had piles of credit card debt, I had to apply the extra paycheck towards my ever increasing debt or towards trying to make ends meet since my spending usually exceeded my income. Every penny of my paycheck was already spoken for by my landlord, the gas company, the electric company, the credit card and the car loan.

Nowadays, I am no longer trying to figure out how I am going to divide my extra paycheck between the various credit card balances. When I get an extra paycheck now, 90-100% of it usually goes directly to my savings account; unless I have something I want to buy that isn't included in my regular monthly budget.

After tallying all the numbers, I should be able to save over $3300 in July.

How will I save this much?
  • Regular $250 biweekly contributions. $750 instead of usual $500.
  • Savings From Extra Paycheck - $1300
  • No Mortgage Payment for July - $1350 (due to refinance)
The $3300+ boost will be a nice addition to my savings account since I will be pulling out about $11,000 to bring to the closing table for my mortgage refinance (more on this later).

When you get an extra paycheck, what do you do with it?

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  1. Green Panda // July 1, 2009 at 7:30 AM  

    It depends. I usually save most and spend about 20%. Right now I may just save all of it to help reach some goals I have.

  2. MLR // July 1, 2009 at 8:12 AM  

    I don't treat it differently.

    My budget is based on my yearly salary divided into the 12 months, essentially.

    It's not like the 2 extra paychecks are surprises or gifts, so I don't understand when my friends use that mentality and go splurge with the "extra" checks.


  3. Jennifer // July 1, 2009 at 8:37 AM  

    I'll set aside the money for my car insurance payment due in a few months, extend my grocery budget a bit to do some stocking up, and the rest will be a debt payment.

  4. junger // July 1, 2009 at 10:12 AM  

    I got my extra paycheck in May. We pocketed the money right away, needing to buff up our emergency fund.

  5. Yana // July 1, 2009 at 11:07 AM  

    We get an extra paycheck in July, and I expect we'll save it unless an emergency occurs.

  6. Philip // July 1, 2009 at 12:52 PM  

    I've been bad... I got a 3rd paycheck in may and I used most of it to get some stuff that I have been wanting to pick up for a while. I probably should have saved and created bigger EF but I don't have debt problems so I did what I wanted.

  7. Frugal Urbanite // July 1, 2009 at 4:12 PM  

    We try to put the extra paycheck into savings or send it towards our car payment. Lately though, it's been going to the never ending barrage of necessary home respairs.

  8. yanji/ebeg blog // July 1, 2009 at 6:25 PM  

    I am just getting on my feet as Hubby was without job for nine months so all my savings were wiped out so we got married very skint. Now we are married we have hopes for a new beginning. Hopefully I can save 100 bucks a month from the housekeeping he gives me as I am a wise shopper and my online earnings I will compound 50% in some good investments and the rest I will save in the bank.

  9. Little Dough Girl // July 28, 2009 at 12:47 AM  

    I get paid weekly, so I have my mortgage set to deduct weekly payments. It alleviates a big part of this question as a good chuck of my "extra" paycheck goes to the house. But, I end up paying a whole extra payment a year! It will short my loan from 30 years to 23!

  10. Slinky // July 30, 2009 at 1:30 PM  

    It gets treated like any other paycheck. With a true windfall, I may take a small amount for a splurge, but 'extra paychecks' are expected and planned for in my budget. It just means I have more cash than usual to put towards my goals.