A summer job is a prime opportunity to start saving for year-round expenses. So if you’re looking to save this summer, you’ll be happy to know that the odds of finding a job are in your favor. In 2013, the Bureau of Labor Statistics reported that between April and July, the youth labor force swelled from 2.8 million to 23.5 million. But after you land your gig, the question remains: how can you save enough to cover your expenses until next summer? Read on to find out!
Cut back spending
Rather than spending your entire paycheck going to the movies, eating out, shopping and buying pricey theme park tickets, you can entertain yourself with other fun-yet-affordable activities. For example, instead of going to dinner and a movie with friends, move your plans to the earlier hours of the day. Meeting up for brunch and a matinee is a much cheaper alternative.
Even better: save money by purchasing a Netflix subscription and invite friends over for a viewing party. On average, movie tickets cost about $8.13. So in that sense, there’s not a lot of savings to be had by switching to Netflix (a monthly subscription costs $7.99) – if you go out to the movies once a month. But, depending on where you live, you could be paying up to $13.33 per ticket. Let’s say you normally see six movies per month, but decide to switch to Netflix – you could potentially save around $72 per month!
If you tend to spend a lot of money at the mall, grab a friend and head to a thrift store instead. You’ll still get to enjoy shopping, but you’ll save lots of money on your purchases. You can also save money making little changes, such as bringing your lunch to work and biking around town to save money on gas. Bringing your lunch to work just two or three times a week, for example, could save you $100 or more per month. Brewing your morning coffee or tea at home, instead of paying $2, $3, or more each time you go to the coffee shop, could save you even more.
Creating and sticking to budget is a great way to ensure you save for the things you need. As a high school or college student you’ll typically need to budget for spending money, college tuition, and college room and board. Depending on the agreements you have with your parents, you may also be responsible for a car payment, car insurance or cell phone payment.
You may prefer to budget the old-fashioned way, with pen and paper. But there are also various apps available to help make budgeting a quicker and easier process. In general, most budgeting apps track your spending, so you can see exactly where your money is going and how much money you’re saving. Many include features that enhance your ability to set savings goals, provide you the option of setting spending alerts, and offer helpful financial tips tailored to fit your needs.
Save strategically to pay tuition and debt
According to CollegeBoard, the average annual cost of tuition for in-state students at a four-year public school is $8,893 and $22,203 for out-of-state students. Costs rise to $30,094 for students attending a private four-year college. Since costs and financial aid varies, it’s important to talk to your parents about whether or not they’ll provide financial assistance, and if so, how much they plan to contribute. You can use this information to create a savings goal. Once you set your goal, calculate what percentage of your paycheck you’ll have to set aside to reach it, and be sure to take this amount out before spending any money, so you don’t accidentally fall short.
Also be sure to save to pay off loans. If you take out unsubsidized Stafford loans, it’s important to pay the interest on them while you’re still in school, so you’ll owe less when you graduate. For example, American Student Assistance notes that it costs approximately $57 per month to pay interest on a $10,000 unsubsidized Stafford Loan, but doing so would allow you to graduate owing $10,000, instead of $13,060. If you practice strategic savings during the summer, you’ll have this money on hand to make interest payments throughout the school year.
Laura Woods, NerdWallet