Question regarding budgeting. When you budget your monthly income what do you do with the two months a year where a bi-weekly paid employee gets paid 3 times? Do you average it out across all 12 months? Not account for it at all and put it towards savings?
Steve, this is such a great question! Many people consider these paychecks to be “found” money and they just blow through the money, but there is so much that you can do with these funds.
Instead of not accounting for this money at all, you can definitely put this into savings. If you don’t have an emergency fund, this money can fund that. If you are on track in the savings department, consider paying down any debt that you may have. This can easily go towards credit card debt, a car note, or personal loan to get rid of it faster.
Next, consider any home or car maintenance. If there is an appliance that needs replacing or something with the car that needs updating (tires maybe). This is a good time to handle that.
If you have a mortgage payment, you can use this money to make an extra mortgage payment. And lastly, check into your insurance, you would be surprised how many people are underinsured. Check your health, car, homeowners and even renters insurance and make sure that you are fully covered. If you need to make any increases this is the time to do it.
So I would take these two extra checks and do something that moves the ball forward financially.
This is a great opportunity to do something good for yourself. Good Luck!
Jennifer is a money, lifestyle, and business expert. Appearing on just about every national TV and radio news network, Jennifer’s mission is to help you thrive affordably. With a law degree and a MBA under her belt, Jennifer is highly qualified to teach you about money and help you make the behavior changes necessary to accomplish your goals. Jennifer hails from Charleston, SC and is based in Washington D.C.