Deleted
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Post by Deleted on Feb 15, 2011 11:57:48 GMT -5
Spin of my last thread... Depending on how often you get paid, you get extra paychecks a year (I understand that this does not apply for the once a month/twice a month members unless you are hourly).
So do you know when you will get it this year? Do you have plans for that money already.
I get paid every week and scheduled to get 4 extra checks this year on : 3/31, 6/30, 9/29, 12/29 (yes I have a spreadsheet). As for my wife she gets paid every two weeks and get 2 extra paycheks on: 7/29 and 12/30
We are splitting it 50/50 between savings and debt.
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SVT
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Post by SVT on Feb 15, 2011 12:10:35 GMT -5
I don't understand this extra paycheck thing. You're getting your yearly salary no matter how you get paid. Does it have to do with working out finances monthly using 4 weeks in a month instead of 4.3 weeks/month or something? When I was hourly and got paid weekly, I just multiplied my week check by 52 and divided it by 12. It all came out fine. I didn't bother with the "extra pay".
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steph08
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Post by steph08 on Feb 15, 2011 12:15:45 GMT -5
I base my expenses on two paychecks a month, so when there is a month with three paychecks, I usually plop the extra one right into saving, since it isn't needed for any standard bills that are budgeted out of the two paychecks a month.
Of course, usually some expensive car or house repair comes up and the extra paycheck goes there, but it is nice to have!
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Deleted
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Post by Deleted on Feb 15, 2011 12:16:58 GMT -5
I don't understand this extra paycheck thing. You're getting your yearly salary no matter how you get paid. Does it have to do with working out finances monthly using 4 weeks in a month or something? When I was hourly and got paid weekly, I just multiplied my week check by 52 and divided it by 12. It all came out fine. I didn't bother with the "extra pay". We base our budget on me getting 4 paychecks a month and my wife getting 2. So in those months where I get 5 and my wife gets 3, they are considered "extra" since nothing is budgeted for them.
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SVT
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Post by SVT on Feb 15, 2011 12:18:41 GMT -5
I base my expenses on two paychecks a month, so when there is a month with three paychecks, I usually plop the extra one right into saving, since it isn't needed for any standard bills that are budgeted out of the two paychecks a month. Of course, usually some expensive car or house repair comes up and the extra paycheck goes there, but it is nice to have! In that case, I personally would just multiply my bi-weekly payments by 26 and divide by 12 to get the average monthly amount. But different things work for different people.
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patchwork150
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Post by patchwork150 on Feb 15, 2011 12:22:12 GMT -5
I get extra checks the same days your wife does.
Usually I need part of the check to tide me over the next month because the pay period is 2 weeks into the new month. However, because I plan around 2 paychecks a month, what I earn from the extra paychecks usually ends up in savings the next month. It's very conveinent to get an extra paycheck in December though lol!
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souldoubt
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Post by souldoubt on Feb 15, 2011 12:23:19 GMT -5
I base my expenses on two paychecks a month, so when there is a month with three paychecks, I usually plop the extra one right into saving, since it isn't needed for any standard bills that are budgeted out of the two paychecks a month. Of course, usually some expensive car or house repair comes up and the extra paycheck goes there, but it is nice to have! In that case, I personally would just multiply my bi-weekly payments by 26 and divide by 12 to get the average monthly amount. But different things work for different people. The problem for me with doing that is the fact that my budget and what I have in my checking account don't really agree. If I budget for income of X dollars but receive less while having a fixed amount go directly from my paycheck into savings then it throws everything off slightly. For me it's easier to budget on 2 paychecks a month and just put that extra one that I receive 2 times a year into savings.
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mandyms
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Post by mandyms on Feb 15, 2011 12:23:23 GMT -5
I get an extra paycheck in April and September. I plan on putting 70% of it in savings and spending the rest of it...can't wait to actually be a little frivalous!
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shanendoah
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Post by shanendoah on Feb 15, 2011 12:25:47 GMT -5
I could do a monthly budget based on dividing my total take home by 12, but honestly, its a little too abstract for me. I work much better with the concrete. So, since 10 months out the year, I only get 2 paychecks, my budget is based on that. I don't figure those 2 "extra" paychecks in to the budget at all. This year, I'll get my extras in April and September (if you're on the opposite 2 weeks as me, you'll get them in July and December). Just because they're not in my monthly budget doesn't mean I don't have plans for those 2 extra paychecks. About half of each will go toward student loan payoff and the other half will go in to savings for DH's school costs.
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Post by mawmawandlovingit on Feb 15, 2011 12:27:35 GMT -5
My 2 extra will also be split 50/50 into savings and paying extra on debt!
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SVT
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Post by SVT on Feb 15, 2011 12:31:12 GMT -5
In that case, I personally would just multiply my bi-weekly payments by 26 and divide by 12 to get the average monthly amount. But different things work for different people. The problem for me with doing that is the fact that my budget and what I have in my checking account don't really agree. If I budget for income of X dollars but receive less while having a fixed amount go directly from my paycheck into savings then it throws everything off slightly. For me it's easier to budget on 2 paychecks a month and just put that extra one that I receive 2 times a year into savings. Yeah, I know what you mean. I never had a problem with it.
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Deleted
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Post by Deleted on Feb 15, 2011 12:31:19 GMT -5
In that case, I personally would just multiply my bi-weekly payments by 26 and divide by 12 to get the average monthly amount. But different things work for different people. The problem for me with doing that is the fact that my budget and what I have in my checking account don't really agree. If I budget for income of X dollars but receive less while having a fixed amount go directly from my paycheck into savings then it throws everything off slightly. For me it's easier to budget on 2 paychecks a month and just put that extra one that I receive 2 times a year into savings. Same thing here. Our net income is usually about $4,600 or so when all is said and done. So we budget for that much for all expenses/savings, etc. If we did it the way you suggest, our monthly budget will be $4,983.33 instead of $4,600 and will leave us with a shortfall of $383.33 that we don't have most months.
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SVT
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Post by SVT on Feb 15, 2011 12:33:06 GMT -5
The problem for me with doing that is the fact that my budget and what I have in my checking account don't really agree. If I budget for income of X dollars but receive less while having a fixed amount go directly from my paycheck into savings then it throws everything off slightly. For me it's easier to budget on 2 paychecks a month and just put that extra one that I receive 2 times a year into savings. Same thing here. Our net income is usually about $4,600 or so when all is said and done. So we budget for that much for all expenses/savings, etc. If we did it the way you suggest, our monthly budget will be $4,983.33 instead of $4,600 and will leave us with a shortfall of $383.33 that we don't have most months. I always leave a buffer in the checking so that's probably why it always worked well.
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ihearyou2
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Post by ihearyou2 on Feb 15, 2011 12:41:46 GMT -5
I hate when people say an extra paycheck when you budget its supposed to be off your annual salary and then break it out by month. Its a timing issue not an extra check.
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Post by Deleted on Feb 15, 2011 12:47:14 GMT -5
I hate when people say an extra paycheck when you budget its supposed to be off your annual salary and then break it out by month. Its a timing issue not an extra check. Hate? Wow, that is a strong word. It might not be an extra paycheck (as in free money) but it is extra as in money I did not budget to spend on monthly expenses. You might budget annually, I budget monthly... at the end of the day it is still the same: all the bills are paid, 401K contributions are made and have have money in savings.
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souldoubt
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Post by souldoubt on Feb 15, 2011 12:48:46 GMT -5
It's really just semantics. I budget it as income in the month I receive it and know it's not an "extra" check like some kind of bonus. It's extra as far as the fact that I live off of 2 checks a month and 2 months a year I receive 3 checks.
Also to play devil's advocate my company bases salary on 26 bi-weekly pays but back in 2009 we received 27 pays because Jan 1 was a Friday so the payday got bumped to 12/31. In that case it turned out to be an extra check for employee's but that's a very rare thing with how paydays fall.
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patchwork150
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Post by patchwork150 on Feb 15, 2011 12:50:28 GMT -5
I hate when people say an extra paycheck when you budget its supposed to be off your annual salary and then break it out by month. Its a timing issue not an extra check. While you are correct, I think it's just sematics we are arguing here The 'extra paycheck' is just not planned for in the budget as far as bills are concerned. The real significance- I budget below my means, which cannot be a bad thing! Dam, the last two posters beat me to it... well, at least we agree!
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shanendoah
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Post by shanendoah on Feb 15, 2011 12:52:28 GMT -5
I hate when people say an extra paycheck when you budget its supposed to be off your annual salary and then break it out by month. Its a timing issue not an extra check. My budget is "supposed" to be based on whatever I choose to base it on. If I wanted to base my budget on still making 60k/yr instead of 80k, that would be my business. I know that in June, my DOD will give DH $50 for his birthday. I know that in December, I'll get $50 for my birthday, and we'll get another $350 for Christmas. Am I "supposed" to build that in to my budget as well and break it down by month? I choose to operate on a budget based on 2 paychecks a month. I do this because it works best for me, and because the super majority of the time (10 months out of every 12) that's the amount of money that comes in. I don't like my monthly out to be more than my monthly in, even if I know that money will be made up 6 months down the road. And yes, I have a cushion in my checking account. So instead, 2 times a year, I get a check that is not spoken for. Its not required to go toward any standard monthly payment. It falls outside the monthly budget and can therefore be used for whatever I want to use it for. In my case, I use it to make an extra debt payment and bulk up savings. Its not "unplanned"; its not a "windfall"; its simply outside the normal monthly budget.
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Deleted
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Post by Deleted on Feb 15, 2011 12:53:19 GMT -5
I don't understand this extra paycheck thing. You're getting your yearly salary no matter how you get paid. Does it have to do with working out finances monthly using 4 weeks in a month instead of 4.3 weeks/month or something? Yes. As ihearyou2 pointed out, it's really a timing issue. I'm used to budgeting with 2 checks per month, so in a 3-paycheck month, I get one that's not designated for specific items. Typically half or more goes into the investments. The remainder is split between paying for our next trip, charity, and maybe something I've decided I can't live without. The latter category has included having a suit or separates made, and most recently having a pearl necklace overhauled into an updated, 2-strand design.
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Cookies Galore
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Post by Cookies Galore on Feb 15, 2011 12:58:30 GMT -5
I pay bills based on pay period. It's just easiest for me to know rent, car insurance, etc. comes out of Check 1 and bills, etc. come out of Check 2. I don't have much in the way odd payments: my quarterly student loan bill is paid for no problem and my annual bills of car registration ($36) and renters insurance ($40, my share) are easily paid for when the time comes. I get paid on Thursdays, so my three check months are March and September. In March I'm getting new glasses and setting something aside for our hotel room down the shore, September is going to be savings and a little splurge money for when we go to Cooperstown. Everything is based out of my annual salary, so it really doesn't matter to me how I break it up, so long as everything is paid on time.
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jeffreymo
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Post by jeffreymo on Feb 15, 2011 13:02:55 GMT -5
I have a spreadsheet that details income/expenses and forecasts on a weekly basis. It just gets absorbed into the general budget. There really isn't any unexpected windfalls for me to make decisions on. I always have a general idea what our tax refund is going to be. I have an opportunity for an annual bonus, and I usually create the if/then scenario in a separate worksheet which we put in place "if" it happens.
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doxieluvr
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Post by doxieluvr on Feb 15, 2011 13:06:05 GMT -5
I do not have extra checks. I use each and every one I get.
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michelyn8
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Post by michelyn8 on Feb 15, 2011 13:10:33 GMT -5
The whole "extra" paycheck thing irks me as much as hearing an hourly employee saying they have "a check in the hole". No, you don't have a check in the hole, you have to actually work a full week before you get paid and when you leave, you get paid for your last week like any other (just happens to be the week after you leave). I get paid bi-weekly and my 3-check months are April and September. As far as budgeting, I do the 26/12 method and have my spreadsheet set up to do a carryover each month. What I don't spend in one category will carryover and be available the next month on paper (IRL is another story ). I decided to try this this year so I can compare actual to budgeted in each category and to also see if the bottom line overruns.
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SVT
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Post by SVT on Feb 15, 2011 13:15:06 GMT -5
Ok, so I'm not alone with the "extra" paycheck thing
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Tiny
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Post by Tiny on Feb 15, 2011 13:19:27 GMT -5
I HATE having a short fall nearly every month when I budget off my Annual Salary since I am paid every 2 weeks (26 paychecks). I base my "monthly budget" on 2 paychecks of income. I find it really hard to send money I didn't have to a bill or to savings. Imaginary Example: Income: 50K per year. Monthly income: 50K/12 = 4166 Income per Paycheck: 50K/26 = 1923 Most months 2 paychecks total income = 1923 *2 = 3846 If I budgeted for having $4166 a month (say to pay bills on the 15th and then on 30th). But, I only got 3846 during those 30 days - I'd either be late or scrambling to have money on the appropriate due dates. My budget works by splitting up my expenses into two categories - what I need every two weeks (at this point it's Groceries and my Allowance - when I was more cash oriented I had other categories) and every month on a due date (mortgage, car payment, utilities, credit cards, etc...). This works really well for me. I agree that the "extra" checks aren't really extra - and I do have to account for Groceries and my Allowance from those checks. My "extra" checks get allocated as follows: my "2 week cash expenses" - groceries and Allowance, and then Long Term Savings (Roth IRA - since I auto transfer only $300 a month). If the Roth will max (cause I had some other windfall that got put to it) - then the money goes to my after tax investments.
I do budget with an eye on my yearly income... twice a year I budget for an "extra check" which goes primarily towards Long Term savings so I can meet my Yearly Long Term Savings Goals.
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ihearyou2
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Post by ihearyou2 on Feb 15, 2011 13:19:31 GMT -5
You can budget however you want but don't call it an extra check, if you want to say I budget excluding two paychecks every year then do it that way it seems kind of odd to me but I hear the monthly argument The terminology is especially irksome because it appears to show a lack of understanding of how much you earn. The only time I would use extra is when I reach the SS limit, then I'm making "extra" money.
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Poppet
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Post by Poppet on Feb 15, 2011 13:20:18 GMT -5
Every time this subject comes up there is this debate about whether it's free money, an extra paycheck or whatnot.
Of course it's not a bonus or anything. Whatever you want to call it, for us it goes into savings.
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Deleted
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Post by Deleted on Feb 15, 2011 13:24:57 GMT -5
You can budget however you want but don't call it an extra check, if you want to say I budget excluding two paychecks every year then do it that way it seems kind of odd to me but I hear the monthly argument The terminology is especially irksome because it appears to show a lack of understanding of how much you earn. The only time I would use extra is when I reach the SS limit, then I'm making "extra" money. No one said it was "free" money that they did not have to work for. Where in this thread did you see that? So because I rather budget using a different system that you would, it shows that i have a " lack of understanding of how much earn".
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SVT
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Post by SVT on Feb 15, 2011 13:34:53 GMT -5
You can budget however you want but don't call it an extra check, if you want to say I budget excluding two paychecks every year then do it that way it seems kind of odd to me but I hear the monthly argument The terminology is especially irksome because it appears to show a lack of understanding of how much you earn. The only time I would use extra is when I reach the SS limit, then I'm making "extra" money. No one said it was "free" money that they did not have to work for. Where in this thread did you see that? So because I rather budget using a different system that you would, it shows that i have a " lack of understanding of how much earn".
He was saying it appears to show that, based on the wording.
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souldoubt
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Post by souldoubt on Feb 15, 2011 14:08:34 GMT -5
Every time this subject comes up there is this debate about whether it's free money, an extra paycheck or whatnot. Of course it's not a bonus or anything. Whatever you want to call it, for us it goes into savings. I think this should pretty much end the discussion. I don't think anyone here considers it some kind of bonus pay.
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