Here’s How to Use an Extra Paycheck This Month

For workers who are used to receiving their paycheck every other week, the calendar is aligned in January to give some biweekly wage earners “bonus” third paychecks during the year. 

For 2026, the bonus months are either January and July (if the first paycheck was paid on Jan. 2), or May and October (if the first paycheck was paid on Jan. 9).

Having an extra paycheck in a month can help you reach your financial goals more quickly. You can use the money to:

Or you can apply this extra paycheck towards multiple financial goals.

Say, for example, you earn $5,000 of income after taxes and withholding each month — paid bi-weekly — and after you’ve paid all of your monthly expenses, you have $100 remaining. But in a month when you receive a third paycheck, you’d have an extra $2,600.

What you can do with that bonus paycheck is ultimately up to you and your financial needs. But if you’re looking for ideas to bolster your financial bottom line, here are Bankrate’s suggestions for putting that extra paycheck to good use.

1. Start, or add to, an emergency fund

An emergency fund can help you pay for unexpected costs, such as car repairs or medical bills. However, only 30% of Americans would use their savings to pay for an unplanned expense of $1,000, according to Bankrate’s latest Emergency Savings Report, for which a survey was conducted in December 2025.

If you’re low on emergency savings, it can pay to deposit the money from an extra paycheck into a high-yield savings account. In addition to providing you with a financial cushion, money in a savings account also earns interest. For example, $1,000 in a high-yield savings account with an annual percentage yield (APY) of 4.00% would earn around $40 in interest over a year.

In the months you don’t receive an extra check, you can also try to save a little at a time, perhaps through a split direct deposit whereby your employer deposits a portion of your paycheck into a savings account via direct deposit.

2. Save for other goals or expenses

If you already have a healthy emergency fund, you may decide to save the money from your extra check toward upcoming expenses or goals:

• Home purchases or repairs: You could set aside the extra money for upcoming house-related costs such as a new refrigerator or a roof repair that’s not covered by insurance.
• Medical expenses: If you’re expecting to incur medical expenses that insurance won’t cover, this extra money could be used to help cover that.
• Insurance payments: Property taxes and insurance premiums are often due quarterly or biannually. An extra check could provide a lifeline if you’re behind on saving for these payments.
• A vacation: Devoting some or all of your extra check toward a planned vacation can help ensure you won’t go into debt to afford it.
• Retirement: You may be able to temporarily adjust the percentage you’re contributing to your 401(k) account. For instance, say you earn $100,000 per year and contribute 6% to your 401(k) — or around $231 per paycheck. Increasing this to 20% for the extra check would result in around $769 in savings (or $538 more) for that check. You could also temporarily increase your contribution to an IRA, as tax law permits.

If you’re saving for multiple goals at once, consider an account that allows you to set up savings buckets, or categories. The ability to allocate money toward each goal makes it easy to keep track of how much you have saved up for each one. You can find an account like this at Ally Bank, among others.

3. Pay off high-interest debt

Almost half (47%) of credit cardholders in the U.S. report carrying a balance, according to Bankrate’s recent Credit Card Debt Survey. While the average credit card interest rate has been decreasing, annual percentage rates (APRs) are expected to remain pricey in 2026.

For example, in one year, it would cost you $111 in interest to pay off a $1,000 balance on a credit card at a 20 percent APR.

Extra money from a third monthly paycheck could be used to pay down high-interest credit card debt more quickly. In turn, this can help free up money for other purposes such as adding to savings, paying down a mortgage or decreasing student loan debt.

What are the three-paycheck months in 2026?

Those paid on a bi-weekly basis will have a three-paycheck month based on their first paycheck of the year.

People paid weekly have five-paycheck months in January, May, July and October in 2026.

How budgeting can help you maximize the benefit of an extra paycheck

Following a monthly budget can help you handle your regular expenses as well as those that come up less frequently. When doing your budgeting, consider the expenses you’re facing in coming months: Is there anything you’ll need extra help paying for? If so, consider devoting funds from your extra paycheck toward those.

Otherwise, you might decide to use the funds to pay down debt, whether it’s from credit cards, student loans or your mortgage. Paying down debt early can save you a bundle in interest.

If you decide to put the money from an extra check in savings, make sure it’s an account earning a high APY. These are often found at online-only banks, which don’t bear the costs of maintaining branches. Another common source for competitive APYs is credit unions; these not-for-profit organizations often share profits with their members in the form of higher returns.

Bottom line

A month with an extra paycheck can be a game-changer for your finances. Generally, there are only a couple of times a year when you’ll earn more money than usual in a month — so consider making the most of this financial opportunity, be it by building an emergency fund, paying off high-interest debt, or saving for various upcoming expenses or goals.