Save two full paychecks in 2020

A simple budgeting tweak could save you thousands of dollars.

Editor’s note: This article was written by Michael Timmermann and originally appeared on Clark.com.

If you want to get out of debt, stash away more for retirement or control excessive spending, making a simple tweak to your budget could save you thousands of dollars.

I’ve been using this budgeting strategy for more than a decade to painlessly save two full paychecks a year.

Here’s an example: Let’s say that after taxes, health insurance and retirement savings are deducted, your employer deposits a check for $1,000 into your checking account every two weeks.

Since there are 52 weeks a year, that’s 26 checks. Your annual take-home pay is $26,000.

If you’ve always been paid this way, you may not realize that you’re receiving two more paychecks a year than someone who’s paid twice a month.

■ Twice a month = 12 months x 2 = 24 checks

■ Every other week = 52 weeks / 2 = 26 checks

If you’re paid every other week, you’ll receive two paychecks a month, except for the two months of the year when you’ll get three paychecks.

January and July may be your three-paycheck months for 2020, but it all depends

on your pay calendar.

Here’s where the budgeting trick comes in. With the help of an online budgeting tool like Mint.com, I set my projected monthly income based on receiving two paychecks a month and nothing else.

Because those threepaycheck months only come twice a year, I treat those checks like bonus money.

Need some ideas? When I was paying off my $86,000 mortgage in two years, I would use those “extra” paychecks to reduce the principal balance.

But you could use that money to reach other financial goals as well:

■ Pay off a debt

■ Contribute to a retirement account

■ Add it to the new car fund

■ Pay an insurance policy (auto, home, life)

■ Grow your emergency fund

■ Erase student loan debt

■ Start a vacation fund

■ Save up for a home renovation

If you decide to use this strategy, the key is to make a plan for your third paychecks well ahead of time so that you spend your money wisely when that direct deposit hits your account.