Here’s how to use an extra paycheck this month

For workers who are used to receiving their paycheck every two weeks, the calendar aligns in January to give some biweekly earners a third “bonus” paycheck during the year.

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

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

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

Say, for example, you earn $5,000 in income after taxes and withholdings each month (paid biweekly) and after you have paid all your monthly expenses, you have $100 left. But in a month, when you receive a third paycheck, you’ll have an extra $2,600.

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

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 $1,000 expense, according to Bankrate’s latest Emergency Savings Report, for which a survey was conducted in December 2025.

If you have little emergency savings, it may be helpful to deposit 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 about $40 in interest over a year.

In the months when you don’t get an extra paycheck, you can also try saving a little at a time, perhaps through a split direct deposit where your employer deposits a portion of your paycheck into a savings account via direct deposit.

Bankrate’s advice

It is advisable to have more than six months of expenses saved in an emergency fund. But the more money you save, the better. For those starting an emergency fund, let Bankrate’s emergency fund handbook guide you in building your emergency fund.

If you already have a healthy emergency fund, you can decide to save the money from your extra check for future expenses or goals:

• Home purchases or repairs: You could set aside the extra money for future home-related expenses, such as a new refrigerator or roof repair, that aren’t covered by insurance.

• Medical expenses: If you expect to incur medical expenses that insurance won’t cover, this extra money could be used to help cover them.

• Insurance payments: Property taxes and insurance premiums are typically paid quarterly or semiannually. An extra check could provide a lifeline if you’re behind on saving for these payments.

• A vacation: Putting some or all of your extra paycheck toward a planned vacation can help ensure you don’t go into debt to pay for it.

• Retirement: You may be able to temporarily adjust the percentage you contribute to your 401(k) account. For example, let’s say you make $100,000 per year and contribute 6% to your 401(k), or about $231 per paycheck. Increasing this to 20% for the additional check would generate about $769 in savings (or $538 more) for that check. You could also temporarily increase your IRA contribution, as tax law allows.

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

Nearly half (47%) of U.S. credit card holders report carrying a balance, according to Bankrate’s recent Credit Card Debt Survey. While the average credit card interest rate has been declining, annual percentage rates (APRs) are expected to remain expensive 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 with a 20 percent APR.

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

Those who are paid biweekly will have a three-paycheck month based on their first paycheck of the year.

People who are paid weekly will have five months of pay in January, May, July and October 2026.

Following a monthly budget can help you manage your regular expenses, as well as those that come up less frequently. When making your budget, consider the expenses you’ll face in the coming months: Is there anything you’ll need extra help paying for? If so, consider dedicating funds from your extra paycheck to them.

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

If you decide to put extra checking money into savings, make sure it’s an account that generates a high APY. These are often found in banks that operate exclusively online and do not bear the costs of maintaining branches. Another common source of competitive APYs are credit unions; These nonprofit organizations often share profits with their members in the form of higher returns.

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