3-Payday May: 4 Tips To Budget for Your Extra Paycheck

Have you checked this month’s calendar closely? If not, you might want to go back and see that, indeed, May 2025 has five Fridays this year. Depending on what you do for a living and your employer’s payroll system, there’s a good chance that you could be seeing three paychecks this month if you get paid every other Friday.

Contents

Save To Build Wealth Create a ‘Freedom Fund’Pay Down Debt Make Passive Income Active

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Before you celebrate too much and end up spending your additional earnings, take a moment to consider using the funds to help your budget, provide some financial cushioning, and put that extra dough towards making sure your money is in order.

GOBankingRates asked a few financial experts to weigh in on this potential three-payday May and what four tips you can use to budget for your extra paycheck.

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Save To Build Wealth

Yes, it seems like a boring choice, but it is also the most practical and obvious option as well. If you are able to pay your expenses on two paychecks every month, having a third one means you have some flexibility to add to your savings account.

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“If you don’t need that money immediately, a short-term certificate of deposit (CD) might be something to consider,” said Anna Dosen, Minnesota branch banking market leader for U.S. Bank. “While terms will vary, some can have rates above 4%. Keep in mind that if you take money out of a CD before it matures, you will face an early withdrawal penalty.”

Stoy Hall, CEO and founder of Black Mammoth, said an extra pay check is the perfect time to build a “no excuse” wealth move into your budget. “Commit before it hits your account to a wealth play,” she added.

Create a ‘Freedom Fund’

Hall suggested that with your additional earnings from May that you could launch or fund, not an emergency fund, but what he labeled as a “freedom fund.”

“This is for leaving that toxic job, investing in your business or taking a sabbatical to pivot your life,” Hall said. “Park the third paycheck in a high-yield savings account labeled ‘My Exit Strategy.’”

Hall proposed using the money to hire a career coach, pay for a certification or build out a website. “Freedom isn’t free — fund it now,” Hall added.

Pay Down Debt

Are your credit card bills adding up? When was the last time you really put some money towards paying off a loan? In Dosen’s professional opinion now is the perfect opportunity to pay down some debt.

“If you find you can’t afford your minimum monthly credit card bill or you feel as if you aren’t making progress in lowering your balance-putting your extra paycheck toward this might be a better option than putting it away in savings,” Dosen explained.

When it comes to other types of debt, particularly if you have a low-interest car loan or mortgage, Dosen highlighted that making an additional payment might be a lower priority depending on your overall financial situation yet still could benefit from being paid down or off with your additional May pay.

Make Passive Income Active

Hall’s financial strategy for the three paydays of May is to go on the offensive and really seek out opportunities to invest and grow your wealth.

“Don’t just save. Deploy,” Hall said. “Use that extra cash to buy a revenue-generating asset — like launching an Etsy store with inventory, investing in vending machines or paying down debt on a rental property.”

As far as other potential opportunities, Hall also weighed in. “[Partner] with a side hustler or service provider — pay for their startup costs in exchange for a revenue share. Now you’re an investor,” he said.

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