If you receive weekly salary, there are a few occasions each year when you’ll receive five paychecks instead of the typical four. This is due to the fact that the 52 weeks in a year aren’t divided equally across the 12 months.
You’ll probably find yourself with a little extra cash in your wallet during these slow months because many routine expenses, like rent, gas, electric, and all those internet and phone bills, are due on a monthly basis. It is beneficial to keep track of the dates of those five-paycheck months so that you may prepare in advance for how you will use the additional money.
How to Deal with Extra Checks
You can simply deposit that extra income into a savings account or invest it. Every month that you receive an extra check, if you do so, you will have added a full month’s net pay to your nest egg and won’t have underpaid yourself in terms of the monthly cash flow required to cover routine expenses.
Alternately, you might use that extra cash to make additional mortgage payments that would only go toward the principle, raising your equity, or to pay down credit card debt. Because you get your equity back when you sell the house, this is also another way to save money.
These additional payments may seem like windfalls, and you can use them to treat yourself to enjoyment that you otherwise couldn’t afford. So why not open a “splurge” savings account that is solely for fun: trips, lavish meals, expensive entertainment, and more. Just be careful not to sacrifice a sensible savings strategy that will enable you to meet your long-term financial objectives for this.
Each of the years 2022 through 2029 offers at least four months with five paydays if you get paid weekly on Fridays. You may use all of that extra money as you like—for entertainment, debt repayment, or anything else.
The remaining months of the decade’s five-Friday months are listed below:
- April, July, September, and December of 2022;
- March, June, September, and December of 2023;
- March, May, August, and November of 2025;
- January, May, August, and October of 2026;
- January, April, July, and October of 2027;
- and March, June, and August, and November of 2028
Paychecks Every Two Weeks
You may experience months where you receive three paychecks rather than two if you are paid every two weeks. But only if your payday happens on the first Friday of a month with five Fridays will this happen. Unfortunately, you will only get the customary two paychecks if your payday occurs on the second Friday of those months. What comes next? Check the five-Friday months on your calendar to determine when your paydays are.
Seasonal Affective Disorder and Your Budget
Holiday expenditures, birthday costs, taxes, school costs, and months with recurring home and car upkeep are examples of seasonal expenses that may occur throughout these months but are not included in your regular monthly budget. If you do receive a bonus, it may arrive just in time to help you stick to your spending plan during those months when you are more likely to go over budget.
Questions and Answers (FAQs)
How can you calculate the amount of taxes deducted from your paycheck?
To calculate your take-home income, you must estimate the following three types of taxes. The first tax is the payroll tax, which most workers will pay at a rate of 7.65%. Federal income tax falls under the second category and is dependent on your tax bracket. The third category is any state or local income taxes. While some people may not have to worry about state or local taxes, others may need to make plans for them.
What does “FICA” mean on a check?
The “Federal Insurance Contributions Act,” or FICA, is more formally referred to as the payroll tax. Together, these taxes—which total 15.3% of each person’s income—fund Social Security and Medicare. Many people only pay 7.65% of these taxes since their employers pay half of them on their behalf.
How much of your earnings ought to be put aside?
There are numerous approaches to determining how much of your income you should set aside for savings. The 50/30/20 rule, which suggests that 50% of your income should go toward your “needs,” 30% should go toward your “wants,” and 20% should go toward your financial objectives, is one well-liked theory. Savings could be regarded as your 20% financial target under this rule. The ideal saving objectives, however, will depend on your situation and variables including debt, income, and the number of years till retirement.