There are pros and cons attached to getting paid bi-weekly, when twice a year you receive a third paycheck. Most people budget on a monthly basis, accounting for two paychecks. When this third paycheck comes around, it’s often money with no budget category!
It’s always a good feeling to get more money in the bank in some months when that magical third paycheck gets to happen. But the wise will make the most of that sudden windfall scenario.
Here are some pointers on how to take the best advantage of that extra cash to improve your financial position. This will include a quick explanation of how you end up with more money in certain months. You’ll also get some tips on how to get the maximum benefit from the boost to your finances.
Do the math
So how do you get that third paycheck? Well, for bi-weekly payments it’s a pretty easy calculation. There are twelve months to a year, right? Most months see you getting two paychecks. That works out to 24 paychecks we budget for. Still with me? But there are 52 weeks per year, meaning that you actually get 26 paychecks. That’s two extra!
The obvious thing to do when working out your pay dates would be to say that you are paid every two weeks on a Friday. So you get two paychecks per month, except for those months when the stars align and you wind up with three.