There’s No Break from Budgeting!

Summer’s here, but your bills don’t take a vacation. While there may be some time for trips to the beach or camping with friends, summer is really the only time of year that you can work full time and earn money for the next school year. You’ll want to make the most of that hard-earned cash, so it’s a great time to review your spending from last year and make a solid plan.

If you haven’t been working full time while in school, getting your first summer paycheck may seem like winning the lottery. Resisting the temptation to spend this money on dining out, a new summer wardrobe or those great summer concerts will be a little easier if you set up a budget and commit to staying on track.

Never set up a budget before? It’s really not that hard. Start by making a list of all your monthly bills and essential expenses, such as your cell phone bill or gas. Enter these into a spreadsheet or budget worksheet. Be sure to focus on expenses that you must pay each month, and add in extra expenses such as entertainment or dining out later if you have funds left over. Since you want to put away as much money as you can for the next school year, savings should be the largest item in your budget. Think about setting aside a specific percentage every paycheck. If you are living at home with your parents and not paying rent or utilities, aim for 75 to 80 percent or more.

Next, estimate all your sources of income, such as earnings from your job, and enter that into the worksheet. Subtract your expenses from your income to see your bottom line. If it looks like you’ll be spending more than you earn, cut your spending or find ways to earn more income, such as a second job, selling some of your unwanted items, or even using your talents for consulting or freelancing.

Summer shouldn’t be all work and no play. Of course you’ll want to treat yourself occasionally, but be smart—it’s easy to spend money without really thinking about it, especially when you’re constantly on the run and those fast food restaurants are calling your name. If you’re just a bit more thoughtful about purchasing decisions, you can usually do without or get what you need for less.

If you’re not living at home with your parents, be sure to plan out your meals, use coupons, and keep an eye out for deals on savings sites such as Groupon. If you are planning to eat out with family or friends, make a pact with them to only go to restaurants for which you have a coupon or one that has a really good special.

When you are buying clothing or the latest gadgets, keep in mind that quality or perceived quality has a significant impact on pricing. Make sure you are really getting good quality, and not just reacting to marketing that entices you to spend more just because of the brand. If in doubt, wait at least 24 hours before making the purchase. It’s amazing how much your perspective can change by the next day—what you thought you couldn’t live without suddenly seems less important.

As the summer progresses, get in the habit of recording all income and expenses, and compare that to your original budget. Alter your expenses (try not to change that “savings” category) and/or your income to keep things in balance. Before you know it, your summer nest egg will grow right before your eyes and you will be less stressed about your finances when classes begin again in the fall.

There's No Break From Budgeting

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