Since beginning my university career, living on my own has taught me an important lesson — it's invaluable to make sure you're getting the most of your summer employment. As a student, the summer represents a period each year when you're likely striving to improve your resume, establish connections that will benefit your future career, and work full-time hours. Your summer employment is an opportunity to create a financial cushion for the upcoming school year, while also gaining experience in the workforce.
So, how can you prepare yourself financially over the summer?
Use your financial history to plan for the future
Go over your spending from the last few months to see how much money you need to sustain your lifestyle while at school. This includes—but isn't limited to—money spent on food, social outings and monthly bills. By understanding these costs, you can predict how much of a financial cushion you'll need for the upcoming school year.
Here are 3 questions you can ask yourself to help put your individual situation into perspective:
Do you have financial aid or student loans to help you financially?
Will you have a job while you're in school?
Do you get any financial help from your family?
Once you understand your past spending and your financial situation, you can use this information to look ahead and plan out your upcoming summer spending.
Begin by calculating how many hours you'll be working over the summer and multiply that by your hourly wage. To make it more realistic, underestimate what you plan on earning in order to compensate for the possibility of sick days or unexpected emergencies so that you don't overshoot your potential income. Personally, I like to deduct one week of working (five days) in order to give myself some wiggle room.
After you've calculated your potential income, make a list of how much money you expect to spend during the summer months. This may include event or concert tickets, weekend getaways, food, transportation and anything else you're expecting to spend money on.
Put your savings into action
After taking these factors into consideration, it's time to begin setting your money aside. I find the best way to do this is to create automatic transfers to a savings account on paydays. For example, if you get paid every two weeks, like on the 15th and 30th of each month, you can set up your accounts so that a designated amount is automatically transferred into your savings account on those days. By setting up automatic transfers, you don't have to remember to put away money each time you get paid. It's a foolproof way to watch your savings account grow.
There's more to consider when it comes to a summer job besides the financial aspects. Your summer employment could help you develop professional skills and widen the network in your chosen field. It could even open the door for future employment opportunities. By having a financial plan in place, you'll be more able to concentrate on your work rather than on your money situation.