4 ways students can make summer earnings last into the school year and beyond


With a little planning and budgeting, what you're earning over the summer can last well into the school year — and, if you invest some of it, even beyond.

That's how Julia Peña, a 22-year-old from Brick, New Jersey, managed to stretch her summer earnings from her camp counselor job throughout her senior year of college. "I lived really frugally," she says. "The only thing I really spent money on was food and going out with friends, and even then I would try to eat at home as often as I could. Once I had spent the amount I allowed myself for the month, that was it."

Here are smart ways to make the most of the income from your summer job.

1. Aim to save at least 50% of summer earnings

If you commit to living frugally and start saving during the season that you're working, you're more likely to cut down on impulse spending and feel empowered to keep saving. Peña, who graduated from Syracuse University in May 2019, saved the majority of her $3,500 in earnings from her summer job last year.

She lived at home with her parents over the summer and only allowed herself about $150 per month to spend. The rest she earmarked for the school year.

"I basically put about 90% of what I made into my savings account, so typically I went back to school with about $3,000 to last me through the fall," says Peña. She also earned some extra cash throughout the school year by helping international students perfect their English.

I basically put about 90% of what I made into my savings account, so typically I went back to school with about $3,000 to last me through the fall.
Julia Peña
Syracuse grad

Leslie Beck, a certified financial planner with Compass Wealth Management LLC in Rutherford, New Jersey, recommends Peña's approach. Try to put away at least 50% of your seasonal earnings if you have to pay living expenses, she suggests, and more if you're living at home.

Remember to put some of the money away for the future, too: "Compound interest is really the sweet spot for seasonal employees," says Beck. "The earlier you can begin saving, even if it's only 5% of your paycheck, the earlier it can start growing."

2. Plan ahead for school year expenses

Budgeting in advance for the major costs you'll need to cover during the school year, like groceries, housing costs, and transportation, can help make those summer earnings last.

Before the start of the semester, Peña set aside money to cover her expenses in specific spending categories: about $60 per week for food and groceries, and $20 per week for outings with friends.

She also estimated $500 to cover the cost of her textbooks. Between course materials and textbooks, college students during the 2018-2019 school year spent up to $1,440, The College Board reports. But you can often get away with spending less: Peña managed to save on her course materials by purchasing or renting used books.

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3. Cut costs on expenses big and small

On a macro level, you can start by reevaluating your housing and transportation options, since Beck says those are two areas where people tend to overspend. Consider renting a room with other students rather than a whole apartment, and if possible, rather than taking on a monthly car payment, opt to get around using bikes, public transportation, and ride-sharing.

On a micro level, you can find ways to reduce your spending — by taking advantage of student discounts, for example. Many retailers and restaurants offer discounts to customers with a student ID, generally around 10%-15%.

4. Set aside 'fun money'

While you're focused on saving and budgeting, make some room for small rewards. Setting aside funds to treat yourself to ice cream or a movie will help you avoid burnout.

"You have to have money for fun," says Beck. "Otherwise life really becomes a drag. But there are a lot of ways that you can have fun that doesn't necessarily mean breaking the bank."

Seek out free events happening in your area. Host potlucks for your friends. Bring seltzer to parties instead of beer. Find out when specialty discounts apply, like during happy hours with half-priced drinks and appetizers, or when movie theaters offer cheaper weekday or matinee tickets.

Enjoying the fruits of your labor without dipping into your savings will help boost your morale and keep you on track to make your seasonal earnings last.

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