This guest post from Corinne is part of the “reader stories” feature at Get Rich Slowly. Some stories contain general advice; others are examples of how a GRS reader achieved financial success or failure. These stories feature folks with all levels of financial maturity and income. Want submit your own reader story? Here’s how.
At my previous job, I was paid on a monthly basis. I loved it. I got all my money for the month upfront, so it didn’t matter when I scheduled automatic savings or investment transfers.
When I moved to a job that was on a bi-weekly payroll schedule, I had to make sure the transfers were split across the month so I didn’t inadvertently empty my checking account! I was grumpy about it at first, but I’ve come to discover a wonderful secret about getting paid bi-weekly: If you’re on a biweekly payroll schedule, you’re getting a couple of “bonus” pay checks every year! Yes, that’s right. Bonus checks. Let me explain.
The Bonus of Bi-Weekly Pay
If you’re like me, your budget is constructed around a month’s worth of expenses. Most bills are monthly, rent or mortgage payments are monthly, and I’m betting you plan your grocery spending by how much to spend in a month. Maybe someone budgets by quarter or even by year, but not many people do.
So in any given month, you can expect to bring home two paychecks. Let’s say you take home $1000 with each check. Your budget allocates how to spend $2000 every month.
But wait a minute. Are you paid bi-weekly? If you look at a calendar, you’ll find that in some months, you actually receive three paychecks. Don’t believe me? Have a look at March. Say you get paid every two weeks on Friday. If your first check came on the 2nd, your next came on the 16th, and the third was on the 30th. All your expenses have been entirely covered by the first two checks; this is the amount of money you planned on receiving. The third is pure gravy!
Assuming you’re not living paycheck to paycheck and have enough of a buffer in your primary savings account, this is a huge opportunity to hit your some of your financial goals hard.
Putting the Bonus to Work
What might you do with this “bonus” money? The possibilities are endless, of course. Here are just a few suggestions:
Naturally, you’ll want to spend your “bonus” money in the best way possible for you and that depends on your own unique circumstances. So, what are you doing with your “bonus” money?
Reminder: This is a story from one of your fellow readers. Please be nice. After more than a decade of blogging, I have a thick skin, but it can be scary to put your story out in public for the first time. Remember that this guest author isn’t a professional writer, and is just learning about money like you are. Henceforth, unduly nasty comments on readers stories will be removed or edited.This article is about Budgeting, Planning, Reader Stories
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