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

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Some extra cash may be about to land in your bank account. But don’t label that third paycheque a bonus, experts warn.

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“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.

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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.

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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.

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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.

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White suggests it’s important to have a plan for the money before it hits your bank account.

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“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.

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For Sara McCullough, she says she generally ignores the two extra paycheques when building monthly budgets for her clients.

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“I base their income and expenses on two paycheques a month,” said McCullough, a certified financial planner and founder of WD Development.

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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.

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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.

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McCullough said it could also just serve as a buffer amount in the bank.

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“This might not be total bonus money,” she said. “There’s a known expense coming up.

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“Your best option in that case is to let it stay in your account,” McCullough added.

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If someone is already ahead on their catch-up and cash cushion needs, the extra money opens up room for getting ahead.

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“The get-ahead breathing room is when you’re not carrying high-interest debt, and your other months are functioning smoothly,” McCullough said.

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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.

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Then comes the “future you” category, McCullough said.

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“(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.

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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.

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But it doesn’t always have to be tied to financial goals and debt.

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“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.

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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.

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“Then, you feel a little bit responsible, but also a little bit of joy from it,” White said.

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This report by The Canadian Press was first published July 31, 2025.

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