5 Ways To Make Yourself Richer in a 3-Paycheck Month
Written by
Cindy Lamothe
Edited by
Jenna Klaverweiden
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With inflation and high prices, getting richer on an average salary seems like some fantasy people only aspire to. But taking advantage of a three-paycheck month can help you grow your wealth.
Below are some effective ways to use an extra paycheck month to make yourself richer.
Stash That Extra Paycheck Into Your Investing Portfolio
According to Dennis Shirshikov, professor of economics at the City University of New York and founder and educational leader at iTutor, a strategy that is already doable for many people is putting that extra paycheck to work by stashing it into an investing portfolio.
For example, you could implement dollar-cost averaging by establishing an automated investment plan into low-cost, diversified index funds or exchange-traded funds to take advantage of the power of compounding over time.
“Of course, as I like to say, investing a small stack of cash on a disciplined basis can be transformative — because even small amounts will compound dramatically over time, making an additional paycheck an asset accumulator,” Shirshikov explained.
He said this method takes advantage of dollar-cost averaging and spreads out exposure to the market over time, ultimately reducing short-term volatility.
Invest the Extra Money Into Real Estate
Another option is to put the extra money into real estate investments.
“Whether it goes towards a down payment on a property, or investing in real estate investment trusts (REITs), this cash can start the process of breaking into markets where opportunities might otherwise feel unreachable,” Shirshikov said.
He’s witnessed how even a modest increase in your real estate budget can greatly enhance mortgage eligibility and secure better terms.
“Putting an additional paycheck to work for a property investment is not just an outlay — it represents a long-term equity play that can facilitate not only hard commodities, but also passive income channels,” he explained.
Send That Third Paycheck to Your Retirement Account
Sending that third paycheck to your retirement account is an evergreen but powerful choice, according to Shirshikov.
By contributing to a tax-advantaged IRA or 401(k), you not only minimize your taxable income but also truly get the most out of tax-deferred or tax-free growth.
“When you put an extra paycheck in a retirement fund, you’re giving your future self a gift,” he said. Shirshikov explained that the compounding effects in a tax-advantaged account often transform what appears to be a small amount into a sizable nest egg over the decades.
“Although I generally recommend this approach for those who are already putting the most into retirement savings, it’s especially effective for those whose contributions aren’t yet maxed out, as you want to make sure that each additional dollar goes as far as possible toward long-run security,” he said.
Use the Extra Money To Invest In Yourself
For something more outside of the box, Shirshikov advised investing in yourself. You can invest in education or skills you want to learn or even start a side business.
“Though not an obvious financial investment in conventional sense, long-term returns in terms of career progression and earning potential can be great,” he said. “Utilizing money that might typically be wasted on entertainment or habit for education and development instead can reap rewards beyond the original investment and become one of the most savvy long-term wealth decisions.”
This strategy, he explained, highlights that sometimes, the best investment you can make is in your own skills and future employability.
Utilize Extra Cash To Boost Your Emergency Savings
Finally, look into using the extra cash to boost your emergency savings.
Though not an instant means of multiplying wealth, Shirshikov explained that a strong safety net will shield you from unexpected costs and high-interest loans, preventing your hard-earned mass of capital from leaking outside of your control.
“The idea of setting aside an ‘extra’ paycheck for emergencies is not about tucking away cash in a jar,” Shirshikov said. “It’s about ensuring that unexpected life events do not reset the clock on everything else you’ve accomplished and maintain your wealth for future building.”
Doing so could set your finances up for success in the long run. “This precaution helps keep your finances agile so that, when the opportunity presents itself, you can pounce first without the need for reactive borrowing,” he said.
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