Even though summer is only a few months out of the year, budgeting your income from your internship or summer job can stretch your money. Transform how you view and preserve cash through discipline and great advice like, the earlier you put healthy money habits into practice, the better.
Don’t take your summer for granted or feel you must wait until you have a full-time job to take advantage of these pointers. With helpful pointers from personal finance expert Shavon Roman, consider how to apply them to your lifestyle.
Read ‘How Gen Z’ers Should Approach Financial Literacy’
Set Goals
First and foremost, create benchmarks. What sounds mundane is so profound. Scientifically, goal-setting changes the structure of your brain so that it’s optimized to achieve that goal. “Determine what your money goals are for the summer,” Roman tells GU. “Are you saving for a big purchase? Are you funding your summer experiences? Create goals that you can measure.” Creating a plan for your money and becoming emotionally attached to it will heighten your likelihood of accomplishing that plan. Get your pen and paper out!
Create Four Spending Buckets
Let’s get down to the nitty-gritty. Goals are where you start and strategy is how you execute. If your goal is to set aside money for the future, aim to save at least 10% to 20% of your summer income. “Needs are the things that are essential. Remember to budget for this category first,” Romans says. “Wants are the things you desire but don’t necessarily need. Determine a specific amount and stick to it.”
Redirect Your Cash
This tip is aimed at those who lack self-control. If your company offers you the option to receive your payments via direct deposit, you should be able to split where your check goes. “Consider opening a High Yield Savings Account to send a portion of your paycheck directly there,” she says. Additionally, utilizing apps like Oportun can help take away small funds to save without noticing.
Remember Uncle Sam
You’re budgeting what you net, not gross. If you make $20 per hour and work 20 hours, you will not take home $400. You have to remember taxes and other fees that may be deducted. “Account for federal and state income taxes in your budget. Your employer will withhold the requested amount using a form from the IRS.” Roman tells GU. If you work a freelance or contracted gig, sometimes taxes aren’t taken out, so remember to save part of your check to pay back taxes.
Your Bank Matters
Though banks serve the same purpose of being a place to store your money, they vary in the offerings they provide. PNC, Bank of America and Valley National Bank provide different student resources and accounts. Roman advocates for people to “explore opening an account at a credit union because they usually offer higher rates and free financial literacy programs.” She provided this site to find a local credit union.
Review, Review And Review Again
The goal is to stay on track. Making a budget and having a strategy only works if you do. Roman suggests “comparing your budget against your actual spending every paycheck and making adjustments as necessary to stay on track.” Don’t feel bad for balling out one or two days—but to accomplish your goals, you need to review and alter your finances.
Consider Financial Aid Impact
“Remember, earned income can impact financial aid,” Roman reveals, “It is critical to consider the impact this can have on funding your education in the future, especially for high school seniors and college students.” Summer earnings rarely affect financial aid, but if you’re making more than $7,000, it would be wise to further research the impact that will have.
Now, you’re ready to set yourself up for success this Summer and beyond. But remember, as you get the bag, to live life too. At this moment, you are the youngest you will ever be. Raven concludes with words of wisdom. “These are the best days of your life. Use your summer earnings to get a head start on creating a solid financial foundation. However, remember to enjoy every single moment and cherish the next few months ahead. Create memories that will last a lifetime. Cheers to an amazing, fun, and money-filled Summer.”
Read ‘What You Need To Be The Office It Girl During Your Summer Internship’