What to do with that extra paycheck in a three-paycheck month
If you get paid on a bi-weekly basis, every year has two months in which you'll receive three paychecks


If you are paid on a bi-weekly basis, August could bring a nice financial surprise. For those getting paid at this interval, each year brings "two months when you will receive three paychecks instead of two" — and "August may be one of those three-paycheck months," depending on your exact pay schedule, said CNBC.
This happens "because getting paid every two weeks equates to 26 pay periods in a year (52 weeks divided by 2), leaving two of the 12 months as 'three-paycheck months,'" said CNBC Select. Exactly when that "bonus" paycheck falls within the year depends on when you received your first paycheck of 2024: "If you received your first paycheck this year on Jan. 5, your three-paycheck months will be March and August," whereas "if you received your first paycheck on Jan. 12, 2024, your three-paycheck months will be May and November," said CNBC.
While it may feel tempting to splurge when your bank account is looking extra abundant, that third paycheck can serve as a great financial opportunity. Here are some possible ways to make the most of a three-paycheck month.
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Stash it in savings
A smart way to use that extra cash flow for the month is putting it straight towards your emergency savings fund. This fund is intended to be "easily accessible in case of emergencies," like a job loss or a major car repair, and "experts recommend that you stock it with enough money to cover three to six months of living expenses," said U.S. News & World Report.
While it is prudent to "save a little at a time," said Bankrate, "you can use a third paycheck or a bonus to jumpstart an emergency fund."
Use it to pay down high-interest debt
Another option for that additional paycheck is "putting the money to good use by paying down high-interest debt, such as a revolving credit card balance," said CNBC.
Credit cards in particular "are one of the most expensive ways to borrow money," with an average interest "of more than 20%," said CNBC. Plus, said CNBC Select, "most credit card issuers compound interest daily, which means that if you carry a balance on your account, you owe more in interest with each passing day."
In other words, "paying down high-interest debt can save you a significant amount of money," said Bankrate, "and then you can use that money to take advantage of robust yields on top savings accounts." A win-win.
Consider an extra retirement account contribution
With all of your financial obligations, it might feel challenging to contribute any more than you already have towards your retirement savings. But an extra paycheck month can serve as a great opportunity to give your retirement account a little extra love.
During a three-paycheck month, "some people might want to increase their contribution percentage to a 401(k)," said Bankrate. This "could be a temporary increase, if your employer allows this," or "even better," you could "use this extra money to permanently increase your 401(k) contribution for the year, using the extra paycheck to help pay expenses throughout the year."
Put it towards an upcoming expense
An extra paycheck could also help you progress in your other savings goals. Whether that's a "down payment on a house, your child's college education, or even an upcoming vacation, the money could help you reach your goal faster," said U.S. News & World Report.
That said, "it doesn't have to be all serious with no fun," said Winnie Sun, the co-founder and managing director of Sun Group Wealth Partners and a member of the CNBC Financial Advisor Council, to CNBC. "Whether that means spending a portion of this paycheck on getting together with friends or family or even just a night out," it is also an option to "go celebrate carefully too."
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Becca Stanek has worked as an editor and writer in the personal finance space since 2017. She previously served as a deputy editor and later a managing editor overseeing investing and savings content at LendingTree and as an editor at the financial startup SmartAsset, where she focused on retirement- and financial-adviser-related content. Before that, Becca was a staff writer at The Week, primarily contributing to Speed Reads.
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