3 Financial Moves Every Student Should Make With a Summer Job

For many students and young adults, summer jobs represent one of the first real opportunities to earn and manage money. Whether it's lifeguarding, landscaping, working retail, or doing food delivery, these seasonal jobs offer more than just short-term spending power — they provide a financial foundation that, if managed wisely, can lead to long-term security and growth.

Unfortunately, many students treat summer paychecks as temporary cash for fast food, quick trips, and impulse buys. While there’s nothing wrong with enjoying the money you earn, there are three critical money moves that far too many young adults overlook — and end up wishing they’d made sooner.

Here’s what students should strongly consider doing with their summer job income:

1. Start a Roth IRA (Even If It’s Just $100)

One of the smartest financial decisions a young person can make is opening a Roth IRA. Most people think of retirement accounts as something to worry about in their 30s or later, but starting early is where the magic of compound growth kicks in.

A Roth IRA allows individuals to contribute earned income (such as wages from a summer job) into an investment account that grows tax-free. That means every dollar earned now, invested in assets like index funds or ETFs, can grow for decades without being taxed again — and can be withdrawn tax-free in retirement.

Why this matters:

• Contributing just $500 at age 18 could turn into $5,000–$6,000 or more by retirement, even without adding anything else.

• The earlier you start, the more time your money has to grow.

• Roth IRAs are flexible: contributions (not investment earnings) can be withdrawn anytime, making them safer for students who might need the money later.

Quick Start:

• Choose a low-fee brokerage like Fidelity, Charles Schwab, or Vanguard.

• Open a Roth IRA online (if you're under 18, a parent or guardian can open a custodial Roth IRA).

• Start with what you can — even $50–100 matters.

• Invest in a broad-market index fund or target-date retirement fund.

2. Set Up a 3-Way Split for Every Paycheck

Without a plan, money tends to disappear. Many students find themselves broke by the end of summer without really knowing where their earnings went. That’s why it’s helpful to divide each paycheck into three categories: spend, save, and invest.

This system creates balance — allowing for fun and freedom in the moment, while still setting aside money for future goals and emergencies.

Recommended breakdown:

• 50% Spending: Gas, food, clothes, fun money

• 30% Saving: For back-to-school expenses, emergencies, or big goals

• 20% Investing: Contributions to a Roth IRA or investment account

This approach also teaches intentionality and discipline, both key to long-term financial success. Even if the exact percentages vary, creating a habit of automated transfers makes financial priorities easier to stick to.

Tools to make this easy:

• Set up multiple bank accounts (most online banks allow free checking/savings).

• Use direct deposit and automatic transfers to “pay yourself first.”

• Try apps like Qapital or Chime that help you set saving rules or round up purchases into savings.

3. Track Where the Money Goes

The earlier students build money awareness, the more control they’ll have over their finances long-term. It’s not about being perfect — it’s about being aware.

Far too many young adults graduate from college without ever learning how to budget. But budgeting doesn’t have to be complicated. Even a simple spending log or weekly app review can reveal trends that lead to smarter choices.

Why it matters:

• Helps prevent accidental overspending

• Creates space for better decision-making

• Builds habits that translate into adulthood (rent, bills, taxes, etc.)

Easy ways to start:

• Use a free app like Mint, YNAB, or Copilot to sync bank accounts and track spending categories

• Do a weekly 5-minute “Money Review” — ask:

  • “What did I spend the most on this week?”

  • “Was that spending worth it?”

  • “Could I redirect a bit toward saving or investing?”

• Use Capstone’s printable Weekly Budget Template to visualize where money is going (link coming soon)

Final Takeaway: A Summer Job Is a Financial Launchpad

A summer job is more than a source of short-term spending money. For students and young adults, it’s a chance to build real-life financial habits — and avoid years of regret later.

By starting a Roth IRA, splitting income intentionally, and tracking spending, young earners can take control of their financial future while still enjoying the present.

Even if the first few paychecks were already spent, it’s not too late to start. One money move made today can set off a chain reaction of financial growth for years to come.