How to get the best bang for your (extra) buck in a three-paycheque month

Hamilton Spectator

4 days ago

Some extra cash may be about to land in your bank account. But don't label that third paycheque a bonus, experts warn.
'What happens a lot of time is when we have this extra come in, we treat it as extra,' said Christine White, a certified financial planner with Money Coaches Canada.
White said she typically sees two reactions from her clients: those who didn't realize an extra paycheque was coming, and those who get excited about it.
Canadians who get paid biweekly receive 26 paycheques spread across 12 months, which means there are two months in the year when they will get three paycheques.
This year, if your first paycheque was received on Friday, Jan. 3, the months of January and August will be your three-payday months. If your first paycheque was Jan. 10, you'll receive three paycheques in May and October.
White suggests it's important to have a plan for the money before it hits your bank account.
'If we know we're going to have these two three-pay months and we have a plan for them, then we can decide consciously and with intention what we want to spend it on,' White said.
For Sara McCullough, she says she generally ignores the two extra paycheques when building monthly budgets for her clients.
'I base their income and expenses on two paycheques a month,' said McCullough, a certified financial planner and founder of WD Development.
Then, she looks into what could be done with the additional cash. In her opinion, it could go under one of four categories: catch-up, buffer for upcoming bills, breathing room and future you.
The extra paycheque could be an opportunity for many Canadians to catch up on paying down credit card bills or a line of credit, she said.
McCullough said it could also just serve as a buffer amount in the bank.
'This might not be total bonus money,' she said. 'There's a known expense coming up.
'Your best option in that case is to let it stay in your account,' McCullough added.
If someone is already ahead on their catch-up and cash cushion needs, the extra money opens up room for getting ahead.
'The get-ahead breathing room is when you're not carrying high-interest debt, and your other months are functioning smoothly,' McCullough said.
This could be a chance for people to build up their emergency fund, or replenish amounts set aside for house repairs, vacations or their next vehicle, for example.
Then comes the 'future you' category, McCullough said.
'(If) you don't see any big expense that you would need money for, then we can look at a TFSA or first home savings account contribution,' she said.
White said this could also be an opportunity for Canadians hoping to build up savings for a down payment but stuck in the paycheque-to-paycheque cycle. She suggested putting that extra cash into savings twice a year automatically — helping build that nest egg.
But it doesn't always have to be tied to financial goals and debt.
'We have a lot of competing demands for our money, or a lot of things we want to do at the same time,' White said.
She often tells her clients to divide the extra paycheque across several goals — a third for debt, a third to have fun and a third for investing, for example.
'Then, you feel a little bit responsible, but also a little bit of joy from it,' White said.
This report by The Canadian Press was first published July 31, 2025.