Have you been working your butt off this summer, but don’t know what to do with all that cash? Before you go on a very expensive mall trip, check out these financially smart things to do with your money. They may not be quite as fun, but will pay some serious dividends down the road. We promise!
1. Reward yourself: No, this does not mean a full-blown shopping spree, but yes, we are giving you permission to spend some of your earnings on—gasp!—clothes. Pick out a tailored, versatile outfit you could wear socially, to a work event, and also to an interview. Think: a fitted black sheath, tailored blazer, or crisp white button down shirt. Let’s call it your “go-to” outfit. It looks amazing on you, and is feminine but polished. Plus, you can wear it again and again; most likely no one is taking Facebook pics at these networking events, so you can repeat this outfit as many times as you please!
2. Networking: Sure, your summer job left you with some substantial pocket money, but why not use it to help you find an actual career? Buy a ticket to a big networking event in the city to start your search for a real job. It’s a great way to meet potential employers and pick the brains of others who work in your desired field. You could even find yourself having some fun! Check out Eventbrite to find upcoming events that could benefit you. Tip: Some events offer discounts with a valid student ID.
3. Stay up to date: We’ve said it before and we’ll say it again: it’s okay to be addicted to both world news and celeb news. So put some of your earnings toward staying on top of both. Get a subscription to Bloomberg Business Week and People to brush up on your financial and celebrity news. When you purchase a magazine subscription, you’re saving up to 85% off the cover price if you were to buy it off the newsstand. It’s a small monthly price to pay to be able to contribute to any conversation, whether in the board room or the ladies’ room.
4. Start a 529 College Savings Plan: A 529 plan, named for the section of the Internal Revenue Code that created it, is a type of investment account that allows you to save for college. If you start early and save over time, this is a tax break worth thousands of dollars. With 529s, you have to pay normal income tax on the money you put into your plan. But you don’t pay taxes on the investments’ earnings once they’re parked in the account, or when you take them out to pay for college. The directory at Savingforcollege.com is a great place to look up the specifics of your state’s plan and any incentives it may offer.
5. Emergency cash: You should always, we repeat always have 6-9 months’ worth of expenses in your savings account to shore against the unexpected. If your car breaks down, your computer crashes, you cell phone cracks, you lose your job; the kind of things that will require a timely fix. This money should not be touched unless you really need it. Put it on a debit card and save it in your wallet, so you have quick access to the money if need be.