Most employees get paid twice a month or biweekly. If you get paid biweekly, there are two months in 2023 in which you will get three paychecks.
If you get paid twice a month, you will get 24 paychecks a year – usually on the 1st and 15th of the month. But if you get paid biweekly, you will get 26 paychecks a year. That’s two extra paychecks a year.
Don’t use the extra paychecks as an excuse to waste money on things you don’t need. The key is to plan your monthly budget based on two paychecks rather than three. You can use the two extra paychecks to reduce your debt, save for your vacation, save for an emergency fund, contribute more to a 401(k) or 529 plan, pay off your mortgage, or do a home improvement project – anything that will improve your financial future.
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If you get paid on Fridays:
- If your first paycheck for 2023 is on January 6, then your three paycheck months are March and September.
- If your first paycheck for 2023 is on January 13, then your three paycheck months are June and December.
IF YOUR FIRST PAYCHECK IS JANUARY 6, 2023
If you get paid biweekly, and your first paycheck is on January 6th, your paydays are as follows. Three-paycheck months are in red.
- January 6
- January 20
- February 3
- February 17
- March 3
- March 17
- March 31
- April 14
- April 28
- May 12
- May 26
- June 9
- June 23
- July 7
- July 21
- August 4
- August 18
- September 1
- September 15
- September 29
- October 13
- October 27
- November 10
- November 24
- December 8
- December 25
IF YOUR FIRST PAYCHECK IS JANUARY 13, 2023
If you get paid biweekly, and your first paycheck is on January 13th, your paydays are as follows. Three-paycheck months are in red.
- January 13
- January 27
- February 10
- February 24
- March 10
- March 24
- April 7
- April 21
- May 5
- May 19
- June 2
- June 16
- June 30
- July 14
- July 28
- August 11
- August 25
- September 8
- September 22
- October 6
- October 20
- November 3
- November 17
- December 1
- December 15
- December 29
How To take advantage of your 3 paycheck months
Have A Plan – If you plan, you can put the extra paychecks to work. Most people don’t have a plan and end up spending that money instead. Even worse, some people don’t even know what months those extra paychecks come in.
Build an emergency fund – If you don’t have an emergency fund, use the extra paychecks to start one. The rule of thumb is you need 6 months of expenses saved for emergencies such as an illness or unexpected job loss. Put emergency funds in a liquid account such as a money market account so that you can easily have access to the money without paying penalties.
Pay off your high-interest debt – if you have high-interest credit card debt or a car loan, use the money to pay some of it off starting with the loan that has the highest interest rate.
Contribute to your retirement account – if you have an IRA or a Roth account, contribute to it to save for retirement. A few hundred dollars every month may not sound like much but due to the power of compounding, it will be worth a lot more in 20 or 30 years. If you don’t have one, it’s time to open one.
Contribute to a discretionary investment account – You can contribute to a discretionary account and invest in index funds or in individual stocks. With these investments, you don’t have to wait until you are 59-1/2 to withdraw your money. You can also invest in dividend-paying stocks. Dividends are a passive source of income that will nicely supplement your 9-to-5 job,
Pay off your mortgage – Consider paying off a portion of your mortgage. Check with your mortgage company to ensure that you have no prepayment penalties. If you do this, more of your future payments will go toward the principal and less toward interest.
Save for a down payment on a house – If you don’t own a house, use the money to save for a down payment on a house
Save money for Christmas gifts – Save the money to buy Christmas gifts at the end of the year
Save for home improvement projects – Use the money to save for that dream home improvement project, whether it is renovating the kitchen or upgrading your media room.
Contribute to a 529 plan – College is getting expensive every year. The earlier you save, the less money you will have to pay out of pocket for your kids’ college expenses.
Bottom line
If you get paid biweekly, you will get two to three extra paychecks a year. What months you get the extra paychecks depends on your pay calendar. Have a plan in place to put those extra paychecks to work. Contribute to your retirement account or a discretionary investment account, save for a vacation or your dream home improvement project, pay off high-interest-rate loans, or contribute to a 529 plan to save for your kids’ college expenses.