When I was hired, I was told an interesting fact. Everyone at my company gets the exact same hourly rate. What sets, say, customer service apart from the president is the amount of their bonus check each quarter. Actually, this check isn’t really so much of a bonus as it is a different way of paying salary, as our “actual” salary is far below the norm for most positions here.

The mentality behind this is that the company is able to give bigger and better bonuses when the company performs well. I do have to say that I definitely feel a desire to help the company succeed when I know that I will directly profit from its success. On the other hand, bonuses can be smaller when the company isn’t doing as well – even when that is due to forces beyond our control, i.e. the stock market (my company is involved in investments and so is affected by people’s desire to invest).

Besides the issue of the actual amount of the bonuses, there are also distinct advantages and disadvantages to being paid this way.

The main disadvantage is obvious: It can make it very difficult to budget. When my wife was working, we had enough money each month to easily pay our bills and expenses every month. But since she quit in July, we are getting by just about by the skin of our teeth each month on my base salary.

As a quick aside, I have to mention how much the emergency fund helps in this regard, both psychology and as an actual resource. When I had to pay $800 to fix my car’s air conditioning system in July (yes, apparently even Honda Civics can break), I was able to draw that out of my emergency fund without a problem, instead of having to hope I was getting a bonus soon to pay for it.

There are some other smaller disadvantages as well. I miss out on a few months of interest by only getting paid my bonus once every three months, though honestly that’s not too big of a deal. Depending on the timing, it can make it harder to contribute the max to my Roth IRA, though again I’m still not at the point where an IRA is my biggest savings goal.

So you might wonder where the advantage might lie in all of this. Well, after being at this job for ten months, I have learned to live on the base salary I am paid. So when I get these sizable checks every few months, what do I do? I save them! I am not someone who splurges on a whim, so I am able to put this money to good use.

Currently, I split each bonus check halfway between the loan to my dad and emergency savings. It feels great to send my dad a nice sized check every three months on top of the monthly money I send him. In fact, with the recent increase I decided to make in my monthly payments to him, I’m now paying $800 a month when you take into account the bonuses. That means I will have my college loan paid off to him in just over two years, though with a prospect of a part-time job for me, and my wife actively looking for jobs again, I hope to have it paid off even sooner.

So in a way, I love being paid like this. If I did get paid my full salary every month, I might very well have the discipline to save it – but I’m not quite as confident about that as I am about my ability to save these bonus checks.

Of course, not everyone in this situation might be able to pay their monthly expenses using only their base salary. If this was the situation, here is what I would recommend: First, calculate how much extra money you need per month for your expenses. So say you are about $200 short each month when being paid only your base salary.

Next, set up a new savings account. You could also use an account that you either never (or rarely) withdraw from. Each quarter (assuming you get quarterly bonuses), deposit three times the amount of money you need each month from your bonus check to this savings account.

Now each month you can make a guilt free withdrawal from that account for $200 to help with your monthly expenses. As for the rest of that bonus check? Save it!