If you get paid biweekly, you know exactly what I mean when I say bonus pay month.
On a biweekly schedule, depending on when you get paid, there are typically two pay days a month. In every job I’ve held, I have been paid on Thursday – once near the start of the month and once near the end.
This is how it works 10 months of the year.
The other two months are a little different.
They are bonus pay months.
During those two months, instead of two pay periods, the calendar aligns to give you three. As a person who gets paid biweekly on Thursday, one of those months this year is November.
I love when this happens – the extra week of income definitely helps so close to Christmas. Additionally, because Jeff and I get paid on alternate weeks, that means instead of two three pay months during the year, we actually get four.
As a result, we’ve gotten pretty good at making the most of these bonus pay months.
How to make the most of a bonus pay month
Wondering how best to put that extra pay day to use? Here are four things you can consider doing:
An extra debt payment
If you’re paying off debt, a bonus pay month is a great time to make a dent in the principle! Our last three-pay month was in August and it allowed us to make an additional $500 payment to our credit line.
An extra savings deposit
Building an emergency fund? Or maybe you’re already done with debt and you’re working away at BS3 (and beyond)? A three-pay month is a great opportunity to beef up your savings!
Extra cash for sinking funds
Do you use sinking funds in your budget? If you do, a three-pay month is a great time to add a little more than usual to these envelopes.
(And if you don’t but you want to, maybe a three pay month is a good time for you to start!)
Treat yourself!
If you’re on track with your debt/savings goals, why not enjoy some of that extra cash? There’s nothing wrong with choosing this option. I wouldn’t recommend taking the whole thing and spending it – I think there’s still room for responsibility in this option – but it might be a good opportunity to enjoy something that you love that doesn’t always fit the budget.
Three Pay November 2018: Our Game Plan
What are we doing for three pay November this year? Here’s the breakdown of how we plan to spend my third pay cheque.
Note: We aim, as much as we can, for flexibility when it comes to budgeting. That said, this is subject to change, understanding that, well, life happens.
Total (after taxes): $1,460.00
Tithing: $120
This is two weeks of tithing at $60 a week. I wrote about why we still tithe even though we are paying off debt here.
Savings: $100
This will bring our emergency fund back up to $5K (why $5K? More on that here). We spent from it in October after our microwave kicked the bucket.
Car sinking fund: $20
This is a standard contribution.
Cat-related items sinking fund: $20
Another standard contribution. This is mostly used for vet appointments.
Travel: $500
We’re trying to build this account, with the idea that we might take a trip in the winter. Money from this account has also helped with things like gas for trips out of town, weekend trips, and flights to visit my best friend in Ontario.
Gifts: $300
Our gift line is primarily for Christmas right now. This contribution will definitely help bulk this up.
Allowances: $50/each
Most weeks, I allocate $20/each for an allowance of sorts. This month, I’ve upped it a little bit to celebrate paying off the credit line.
The Daily Budget: $200 (but really, $250)
This is the section of our budget that is used primarily for groceries and gas. Technically, this will be $250 for this pay – but that $50 is already earmarked for another purpose this month (it will likely be put in an envelope and used at my hair appointment in December). So no real change here.
But wait – what about debt?
You probably noticed I didn’t include an extra payment to our next debt: the student loan. This was not an accident. We’re not making one.
Why? Well, put simply, it’s because I…don’t want to.
That sounds bad but it isn’t. Our November budget already includes a whopping $1,448 in payments to debt between the minimum student loan payment and finishing up the credit line.
This isn’t a matter of sticking our head in the sand and ignoring the problem, but rather, taking a short breather to prepare for the next step. We’ll treat ourselves a little with this bonus pay – then go right back to aggressively tackling debt in December.
Final Thought
Bonus pay months are awesome. In our case, three-pay November will enable us to beef up our Christmas gift and travel funds, replenish our emergency fund and give us a little extra pocket money before we start tackling our next big challenge.
Do you have months where you get paid three times? How do you budget that cash?
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