November is a month of extras. Extra hour of sleep, extra layers of clothes (for those of us in Michigan), extra food at holiday gatherings, and for my husband and I — an extra paycheck! Our monthly budget accounts for bi-weekly paychecks but June and November brought a third check this year. There are endless options of what this extra income can be used for. If you haven’t already incorporated the extra income into your budget, here are a few ideas.
Catch up on Bills
Are you behind on any payments? If winter is approaching in your area, you could even plan ahead with the extra paycheck to prepare for the rise in your energy bills if you crank up the heat.
Make an extra payment on your mortgage
Say you took out a 30-year fixed rate mortgage for $250,000 at 4%. If you only paid an extra $50/month toward your mortgage, you’d shave off 26 months of payments and save $15,000 that would have been thrown away to interest! Imagine how much time and money you could save with an entire 3rd paycheck? Or even half of that 3rd paycheck?
Take a vacation
Maybe you’d consider this a selfish route, but when is the last time you got to go away or did something fun? My husband and I are very driven when it comes to our financial goals (as evidenced by paying of $30,000 of student loans in 9 months!) so we set aside an amount each month that goes toward vacations. If we didn’t intentionally set money aside then we’d probably never get away. Being zealous in pursuing financial goals is great but being zealous in enriching our marriage is also worth the extra money we could be putting toward our financial goals.
The holidays are quickly approaching and unless you’ve been putting away a little here and there to save for gifts then this paycheck may be your Christmas shopping money.
Budget for Health’s plans
Super boring but super helpful; our third paycheck is going right toward our “home-sweet-home” savings account. We made the same boring decision with paycheck #3 in June and put it toward our savings for a second car we may need depending where we move. Our apartment lease will be up this May and we hope to have a fat down payment to put toward our first home. We’re almost halfway there!
What do you do with the extra money after a triple-paycheck month?
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.