As summer approaches, many families are planning vacations, celebrating graduations, and enjoying longer days. While it’s a time to relax, it’s also a great opportunity to stay intentional about finances without taking away from the fun.
One of the biggest transitions this time of year is students being home from school, and especially those who are entering the work force full-time. This is often the first time these individuals manage money independently. A simple starting point is the “3 bucket” approach: fixed expenses (rent, insurance, subscriptions), flexible spending (food, gas, entertainment), and savings. Using a budgeting app or even a simple spreadsheet, along with checking your bank account a couple times a week, can help avoid overspending.
Summer is also a great time for students to build a financial cushion. If a student is working a summer job, a practical rule is to set aside 20-30% of each paycheck into a high-yield savings account. These accounts typically offer higher interest rates than traditional savings accounts, which often pay only a fraction of a percent.
From there, it’s important to think about the purpose of that money. If it may be needed in the near term, keeping it in savings makes sense. But for money that likely won’t be needed for many years, investing can be an option depending on the goal.
For young earners with full-time employment and more earned income, contributing to a company retirement plan makes sense to get the company match. Beyond that, contributing to a Roth IRA is one of the most powerful long-term tools available. A Roth IRA is designed specifically for retirement, allowing contributions to grow tax-free. For 2026, the maximum contribution is $7,500, and starting early gives those dollars decades to compound. For example, if an individual contributed $7,500 per year for 35 years and it grew by 8% per year, they would have accumulated $930,000 that could be used tax-free for retirement. However, if they waited 10 years (and contributed for only 25 years), they would have accumulated $395,000. What a difference it makes to start early!
One of the most important habits to build early is how you use credit cards. Carrying a balance doesn’t just mean paying interest — it can also hurt your credit score, especially if balances stay high or payments are missed. Your credit score plays a major role in qualifying for auto loans, apartments, and mortgages, as well as the interest rates you receive. A lower score can lead to higher costs or difficulty getting approved. A simple rule is to treat a credit card like a debit card — only spend what you can pay off in full each month.
Taking a few minutes each week to review spending and stay on track can prevent small issues from becoming larger problems. At the end of the day, financial planning isn’t just about discipline — it’s about balance. With a bit of structure and intentional choices, you can enjoy the season while staying confident in your financial future.
If you have any questions, or are seeking any financial planning guidance, please feel free to contact Menninger & Associates at (610) 422-3773, or visit our website at www.maaplanning.com.
Securities and advisory services offered through LPL Financial, a registered investment advisor, member FINRA/SIPC. The opinions voiced in this content are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a decision. Investing involves risk including the loss of principal. A Roth IRA offers tax deferral on any earnings in the account. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Limitations and restrictions may apply.
