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Boost your savings or reduce your debt by an entire paycheck – painlessly!

May 25, 2018

By Pam Leibfried

When I joined Alliant’s team of volunteers teaching Operation HOPE’s financial literacy curriculum at area schools, I spent some time researching budgeting and savings techniques to find tips to share with my students. One of the savings tips I found caused a major “eureka,” lightbulb-over-the-head moment for me.

I get paid every other week, which means that I receive two paychecks per month for 10 months, but a third paycheck during two months.1 The tactic that I think is pretty brilliant is to trick yourself into thinking of those third monthly paychecks as “bonus” paychecks instead of as regular pay.

You can then use the bonus paychecks to pay down debt or boost your savings. Dedicating two whole paychecks toward specific financial goals is a great way to make huge strides in achieving them.

Why is it like a bonus?

Let’s assume that your expenses are pretty consistent from month to month and you are making ends meet during the 10 months when you get only two paychecks. It's logical, then, that if you can successfully pay your monthly expenses with the income from two paychecks during those 10 months, you should be able to do so during the two months when you get a third paycheck. So you can dedicate those third paychecks toward other financial goals.

When will you get your “bonus” paycheck?

Be strategic in planning how to use your next "extra" paycheck to accomplish your financial goals of debt reduction or a savings boost.

And because a big part of being strategic is having a plan, we've calculated the dates when you'll receive an extra/bonus paycheck for the next two years and provided it in the table below. Add them to your calendar so they'll be baked into your budget and financial plan! 

Next paycheck   2018 “bonus” paychecks   2019 “bonus” paychecks   2020 “bonus” paychecks
May 25 March & August  March & August January & July
June 1 June & November  May & November May & October


Why some months have bonus paychecks

When you get paid every other week, you receive 26 paychecks each year (52 weeks divided by 2), which means you receive two paychecks most months. But if you think it through, two paychecks a month for 12 months equals only 24 paychecks, not 26. So in most years, there are two months of the year (generally, months in which you get a paycheck on the first or second day of the month), when you get three paychecks.

Pam Leibfried is a marketing content specialist whose love of words led to a writing and editing career. After a brief stint teaching English, she transitioned to corporate communications and spent 20 years at The Nielsen Company before joining Alliant’s content development team. Early in her work life, Pam’s friend Matt explained the benefits of a 401(k) and her dad encouraged her to start a Roth IRA. Their good counsel prompted her to prioritize retirement savings, which just might enable her to retire early so she can read more and live out the slogan on her fave T-shirt:  “I have a retirement plan: I plan on quilting.”   

Fun bonus paycheck trivia: Because leap years add days to the calendar every four years, there are occasionally years with 27 biweekly paychecks and years with a third three-paycheck month. Some people refer to these years as “paycheck leap years” even though they do not necessarily correspond to actual leap years.