Having a summer job is a great way to earn a little extra cash while gaining valuable work experience. It also gives you the chance to build your financial independence and establish good money habits. Whether you’re saving up for college, planning a trip, or are simply looking to make the most of your hard-earned money, learning smart money habits today can set you up for long-term financial success.
The team at American State Bank has put together this guide of five smart ways to use your summer paycheck, along with some helpful tools and services to guide you every step of the way. Let’s dig in!
1. Start With a Budget
The first – and most important – thing you should do is create a simple budget for yourself. Make sure you’re tracking your income, setting smart spending limits, and planning your savings. Setting – and sticking to – a budget can help you avoid the “where did all my money go?” feelings that so many experience.
American Savings Bank has several online and mobile banking tools that can help you monitor your spending in real time and allow you to set up alerts to stay on track.
2. Open a Checking or Savings Account
If you don’t already have one, taking home your first paycheck is the perfect time to open a checking account for your everyday spending and a separate savings account for your short- and long-term savings goals. Keeping your money separated helps you avoid accidentally overspending and jeopardizing your future goals.
The team at American Savings Bank offers a free “thank you” gift to anyone opening their first checking or savings account with us, or those who refer a friend to open theirs! We also have a great mobile app that makes it easy to manage your money no matter where you are.
3. Save for Short- and Long-Term Goals
Saving money doesn’t have to be difficult. Setting aside a small amount of each paycheck for your short-term goals (like concert tickets, new shoes, etc.) or long-term goals (like college tuition or a new vehicle) can be as simple as $10-20 a paycheck. It all adds up quickly!
Want to learn more on how to grow your savings and better plan for your future? Talk to our financial center team for more tips and tools!
4. Avoid Common Traps
Taking home that first paycheck feels great, but that feeling can easily lead you to spending too much on impulse purchases and other extraneous purchases. Take care to avoid common pitfalls like living above your means or taking out a high-interest credit card or loan.
For more tips on how to avoid common financial traps, check out our blog post: “7 Money Traps to Avoid in College” – the tips, while aimed at college students, can be useful for people of all ages.
5. Build Your Credit the Smart Way
Getting a starter credit card is a great way to smartly begin building your credit history, and American State Bank can hook you up with your first card today! Be sure to do your best to pay off the balance in full every month to avoid interest charges.
Before you apply, check out our “7 Important Credit Lessons Every Teen Should Know” blog post for more information on how to build your credit the right way and avoid sliding into a debt trap.
Final Thoughts
Getting a summer job is more than just a paycheck; it’s a way to build smart financial habits that will stick with you for the rest of your life. With the right financial tools, and a great support team like the people at American State Bank, you can learn how to get on – and stay on – the path to financial freedom. Contact us today to open an account, explore our financial tools, or chat with a member of our team.
