Thursday, April 05, 2007

Putting Extra Paychecks to Work

Over the last two weeks, I've written several posts about managing part-time jobs. But what about the extra paycheck? Here are a few tips based on my own experience and research.

  • Save the part-time pay in a separate account, says my friend Cynthia, who works in a doctor's office in the day and at Dippin' Dots at night. A separate account keeps the extra paycheck from disappearing. The accumulated savings builds momentum,which makes it easier to save. The money feeds itself.
  • Have a long-term goal. My friend Cynthia is working to pay off student debt. She lets about three months of extra paychecks accumulate in a special savings account and then applies the lump sum to her student loan balance. It's easier, she says, to see progress with this strategy. My father worked extra jobs to help pay for the new home my family built when I was a kid.
  • Pay bills: Extra paychecks can be used to pay specific monthly bills.
  • Emergency repairs or expenses.
  • Buy household items. Replacing our shrinking supply of cutlery was low on my priority list, but we really needed a new set. Therefore, I used a second-source income check to purchase a new set of flatware from an online vendor. Because the replacement set did not come out of our normal budget, the cutlery felt like a free gift when it arrived via UPS.

These links also provide helpful info about managing extra or second income:

Key Bank recommends setting up priorities.

CNN has a helpful piece about using your part-time job to get extra perks.

Tomorrow: Extra Paycheck Traps to Avoid

Here are the other part-time income stories I've written:

Different Types of Part-Time Jobs

How to Make a Part-Time Job Work: Tips from My Dad

How to Make a Part-Time Job Work: Tips From College Students


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