Smart Money Moves: How to Manage Your Summer Job Earnings

Working between college semesters gives you a great opportunity to make smart financial moves.

Working between college semesters gives you a great opportunity to make smart financial moves.

Some college students take courses during the summer to get ahead on their studies. If you're not going that route, your best bet is to find yourself a job and earn some money.

Many college students who work during the summer will inevitably blow their earnings on frivolous things like vacations, clothing, and gadgets. But you have a real opportunity to put that money to good use. Here are a few smart things to do with your cash.

1. Pay for your upcoming semester

Paying for upcoming expenses is a smart thing to do with your summer earnings.

For example, if you earn $3,000 over the summer, you can use that cash to pay your tuition bills in the fall or spring. You can also use your earnings to pay for expenses like books, travel to and from school, and food -- things you might otherwise have no choice but to charge on a credit card.

2. Build an emergency fund

College students need savings, too.

Is your car your transportation to and from class? Imagine that it breaks down and requires an expensive repair. Without money in the bank, you may be forced to charge unplanned bills on a credit card and rack up costly interest. A better bet is to build an emergency fund. You can use your summertime earnings to do just that.

How much money should you have on hand for emergencies? Most adults are advised to sock away a minimum of three months' worth of living expenses.

As a college student, your monthly expenses are more variable. If you live at home during school breaks, for example, you won't have the same expenses you do when you're dorming. In that case, aim to have a few thousand dollars tucked away in the bank. This is especially crucial if you're already financially independent and your parents aren't picking up the tab for your living costs.

It's tempting to spend your summer job earnings on something indulgent. But you might quickly regret it.

That said, there's nothing wrong with using a portion of your earnings for something fun while saving most it for more responsible purposes. After all, you deserve at least a small reward for plugging away at a job all summer when you could've been bumming around having fun.