Three-Paycheck Months: How to Make the Most of Them
If you're paid every two weeks, you get 26 paychecks a year. Twelve months with two paychecks each accounts for 24. The other two land in months that get three paychecks.
Those two months are some of the best budgeting opportunities of the year, if you see them coming.
Why they happen
A biweekly payday comes every 14 days. Most months are 30 or 31 days long, so a month gets three paydays whenever its first payday falls in the first two or three days. That happens twice in most years (and three times in years with 27 paychecks).
Which months they are depends on your exact payday, so your three-paycheck months might differ from a coworker's.
Budget on two, not three
The key is to build your regular monthly budget on two paychecks. Rent, utilities, groceries, minimum payments: all covered by two checks.
Then the third paycheck in those months isn't needed for anything. It's free to use on purpose.
If your budget currently needs every paycheck, including the third ones, work toward the two-paycheck budget over time. It's one of the biggest stress reducers there is.
Good uses for the third paycheck
- An extra debt payment. One extra payment on a high-interest credit card can save a surprising amount of interest. Put it toward the debt with the highest rate.
- The yearly bills. Car insurance, registration, memberships, the annual subscription that always catches you off guard. Set the third paycheck aside for these.
- The emergency fund. Two extra paychecks a year adds up fast.
- A sinking fund for holidays or back-to-school. Spending you know is coming.
- Something you enjoy. A planned treat beats an unplanned one.
For hourly workers
Your three-paycheck months will still come, but the size of each check depends on your hours. Plan with a conservative estimate, and treat any overtime in those months as extra on top of the extra.
Finding your three-paycheck months
Look at a calendar, find your next payday, and count forward 14 days at a time. Any month with three paydays is one of them.
Or let software do it: IncomeSync projects every payday for the year, for every job in your household, so the three-paycheck months show up on your calendar and cash-flow view months in advance.