Budget (Not Bust) Your Summer Earnings

Summer fun often can also mean summer spending, causing your hard-earned cash to quickly evaporate if you’re not careful.  Since the money you earn over the summer may need to last you well into the next school year, it is important to develop a plan to make sure you are stashing away as much cash as you can right from the start.

The first step is to set a savings goal. If you are not planning to work during the school year to supplement your income, you should plan on saving about $3,000 for books and other miscellaneous expenses throughout the year.  However, this might be challenging if you are only making at or near the minimum wage.  Assuming you work 40 hours a week at $8 per hour for all 13 weeks of the summer, for example, your weekly take-home pay will be about $250 depending on the state you live in.  That means you can expect to earn only about $3,250 in total, so perhaps your savings goal should be a little lower. That’s why many students choose to work part-time during the school year or rely on work-study funds.  For those of you with weekly earnings that vary (waiting tables for tips, etc.), try to set a goal of setting aside 70-80 percent of what you take home.  (This, of course, assumes that you are living at home and not paying for rent or other major living expenses.)

A sure-fire way to help you reach your goal is to automate your savings or set up a reserve through your bank.  This way, the money is set routinely aside with each paycheck you deposit, and it’s easy to track your progress.  Ask your bank representative for assistance if you need some help setting this up.

Next, create a budget for any remaining funds you are taking home.  This can be as simple as setting a weekly spending limit or a more robust budget plan that itemizes your expected expenses such as gas or cell phone bills.  Getting in the habit of setting up a full budget plan every month, will not only benefit you over the summer, but will help you keep track of your overall spending and making your resources last during the school year.

Another tip is to plan ahead for any special, possibly expensive events such as weddings, concerts or birthdays you will be attending over the summer.  If you know when these are coming up, you can plan to spend less a week or so before.  This will provide you with some flexibility and help you avoid having to worry about cash when you are trying to enjoy yourself. Add an estimate of what you think you can afford to spend at these events as part of your budget plan.

While you certainly want to have some fun over the summer, keep your eye on the prize and remember that your ultimate goal is to earn your degree and graduate on time.  Use your summer work earnings wisely, and build up a nice nest egg that will give you peace of mind during next semester.

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