May is the best month of 2013.
My employer pays my salary in bi-weekly direct deposits. I have become accustomed to a monthly routine of my cash flow based on two paychecks per month. All of my expenses and cash outlays are an allocation of these two pay days.
The month of May, however, was different.
It was better.
Not only was it my birthday month, but it's the only month in the year 2013 that will have three pay days that fall within its 31 days.
Because my monthly cash flow routine is based on only two pay days, this third check is essentially a free bonus to my budget. After all, June will have two of its own pay days.
If May is a triple pay day month for you, or maybe yours is a different month, how will you allocate that third pay day?
Will you head to the mall and watch those dollars disappear in minutes?
Will you pay off and close down a credit card?
Maybe you'll put it towards a ROTH IRA or make an extra house payment?
The best bang for your free bonus buck, is to pay off debt. This frees up cash flow in your monthly two check based budget by reducing the amount of interest expense owed.
If you are debt free (congratulations), maybe you're thinking about setting it aside in a retirement or college savings fund. There's no better time than the present to put the laws of time and compounding interest income to work for you.
Whatever your situation, take a stab at using that freebie paycheck to improve your balance sheet. No, it's not a life changing amount of money, but it is SOMETHING. Even if your cash flow is really tight, try to pull aside a half or third of that paycheck and use it to move one small step in the direction you want to go.
The old adage is if you're not telling your money where to go, it's telling you where to go. Don't miss the third paycheck opportunity.
Update:
I should have double checked the marked up calendar I was using. Turns out that November is also a three paycheck month if you're on the same schedule as my employer is.
You might challenge yourself to pay for all of your Christmas gifts this year with your third paycheck instead of a credit card.
2 comments:
So you get paid 26 times a year what other Month is a three paycheck month? I say pool both extra payments together and put towards LPL VEGAS..better return than the rule of 7's....
You might be right, November might be another triple. I was thinking there was only 25 pay days this year with one just prior to and just after 2013. Might need to update my calendar at work.
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