Earn Smart, Save Smart

Planning ahead to cover your expenses

by Christina Couch

It's called summer vacation, yet for students on a budget, it's anything but. While there may be a day here and there for a weekend beach trip, summer is the only time of year that you can work full-time and hopefully bank enough to keep you in the green for at least the first semester. Your financial future for the upcoming year hinges on how well you maximize profits and minimize expense. Take a minute to review your business vocab, and you'll be one step closer to a fat wallet and a semester free of financial stress.

Gross Income: Your Total Earnings

You want this number to be high…very high. To do that, choose a job or internship that pays well, and set it up early before you have to compete against every other college kid on break. Your company may offer a tuition reimbursement or subsidy plan that would put just a few more bucks in your pocket. Consider taking a second job (it's only for the summer), selling some things you don't need on eBay, or picking up a few odd jobs in your spare time. Remember that you'll probably get back any taxes taken out, sending another much-needed check your way in spring.

Net Income: Your Gross Income Minus Expenses

The first thing to do is define “expenses.” What are you willing to spend money on this summer? Creating a weekly budget can help prevent you from blowing your check on unnecessary expenses. Plastic counts too, so before you say “charge it,” think of that gruesome bill at the end of the month. If possible, have your employer deposit your earnings directly into your account. The less cash there is burning a hole in your pocket, the less likely it'll be gone before your next payday.

Investment Return: How Your Money is Working for You

When cash sits in a savings account instead of a box under your bed, it draws interest without you having to lift a finger. If you can clear the minimum balance requirement, invest in a money market account to get the best return interest rate. Students interested in longer term, higher profit investment options should consider savings bonds (typically bought at half the value they return) or mutual funds. Though your cash will be tied up for months, if not years, you'll be rolling in dough when time's up.

Christina Couch is a freelance writer based in Richmond, Virginia, and Paris, France. Her writing credentials include MSN/Encarta Online, CollegeBound Teen, and Studentscoop.com. She can be contacted at couchcs@gmail.com.