1. Think about getting a summer job
A summer job can help teach you how to take on more financial responsibility as you will:
- Have income that you decide how to save and spend
- Practice making important money-related decisions
- Begin considering what other money products you may need, like a savings account or credit card
Once you start earning income, you’ll want to consider how best to manage it. Things to think about:
- Opening a checking account with helpful features. Already have an account? If it’s a high school account, upgrade to a college account or similar to match your next life stage.
- Opening a savings account to start putting money aside (even if it’s only a little), working towards an emergency fund and future goals.
- Setting up direct deposit for an easy way to access your money and automate your savings.
2. Set money aside for college expenses
If you’re going to college, it's important to consider possible expenses other than tuition that may pop up. Dining out, housing, electronics, books, Greek life, transportation and socializing costs can sneak up on you, but may be part of a great college experience. Saving for them now will help you:
- Be better prepared for unexpected expenses
- Practice financial responsibility by planning ahead
- Reduce the stress of managing expenses while paying for college
3. Update or create your budget
Now that you’ve thought about the costs associated with attending college, a budget (PDF) can help you feel more in control of your financial future. It is a tool that can help you:
- Track expenses
- Spend less than you earn
- Determine your needs vs. wants
- Save for what matters
One method to distribute your income is to use the 50/30/20 rule. This method breaks down your income in three ways:
- 50% to “needs” like housing, transportation, and groceries
- 30% to “wants” like entertainment, dining out, subscriptions and hobbies
- 20% to goals like emergency savings, studying abroad and buying a car
When budgeting, make sure to consider what you need versus what you want. Also, don’t forget to include those often-overlooked essentials like toilet paper, laundry supplies and self-care items that can add up quickly.
4. Spend wisely
To help you avoid sneaky expenses, practice purposeful spending. As you navigate this new financial experience, some habits can disrupt your budget such as:
- Impulse purchases
- Spending on trends
- Unused subscriptions
To help avoid these spending pitfalls, regularly check-in with your budget and goals, making sure to identify what’s a need versus what may be a want. Perhaps that sale isn’t such a bargain if you don’t need the item. Maybe that trendy item isn’t worth the financial strain it may put on you. If you haven’t used that subscription in a while, direct that money towards your goals so you can reach them faster.
Developing good money habits now will help set you on the path for financial success in the future. Take advantage of the excitement around entering this next phase in your life and start practicing good money habits now.
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