Many Americans are feeling increasingly cash-strapped. An extra paycheck next month could help.
If you are a W-2 employee and get paid biweekly, there are two months out of the year when you will receive three paychecks instead of the usual two.
Depending on your pay schedule, your first three-paycheck month in 2023 could be March.
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These are the three-paycheck months in 2023
If your first paycheck in 2023 was Friday, Jan. 6, your three-paycheck months will be March and September.
Otherwise, if your first paycheck in 2023 was Friday, Jan. 13, your three-paycheck months will be June and December.
How to make the most of a three-paycheck month
“March is a great time to receive that third paycheck,” said Winnie Sun, co-founder and managing director of Sun Group Wealth Partners, based in Irvine, California, and a member of CNBC’s Advisor Council.
Particularly with the tax deadline approaching, there are some smart strategies you can employ, she said, such as setting some funds aside if you expect to owe money this year or putting the cash toward your individual retirement account, which can potentially lower your tax bill.
But before making any investment moves, “if you have credit card debt, that needs to be paid off first,” Sun advised. As day-to-day expenses continue to rise, Americans are taking on more debt. At the same time, annual percentage rates are also heading higher, making it much more expensive to carry a balance.
“Now might be a really good time to have that extra cash, given the uncertainty in the economy,” said certified financial planner Douglas Boneparth, president of Bone Fide Wealth in New York and a member of CNBC’s Advisor Council.
Still, rather than plan monthly expenses and savings from paycheck to paycheck, a better way to budget is to consider your income over the course of the year to smooth out the highs and lows and then view your cash flow on a monthly basis, Boneparth advised. (Here’s a simple way to make a monthly budget and start saving money.)
The “bonus” paycheck “is really an illusion,” he said.