Summer Earnings

How to get a great summer gig (and live well next fall)

Summer is a great time to earn some extra cash and get some real world experience. Get some tips for getting a great one—and on what to do with the money you earn.

Podcast transcript


PETE: Welcome back to How Not To Move Back In With Your Parents here, on the IU MoneySmart Radio Network. I’m your host Pete Planner and this is my co-host Alex, hello.

ALEX: Hello.

PETE: Good to see you, my man.

ALEX: Thank you.

PETE: Last episode of how not to move back in with your parents which of course you can find at We discussed internships, how to get them, paid or not paid. But ultimately, if they are paid, you’re gonna accumulate some assets. You’re gonna accumulate some money. And here to discuss that with us this week is Director of the Office of Financial Literacy, Indiana University, Phil Schuman. Hello, Phil.

PHIL: Hello there.

PETE: Boss man, you’re my boss.

PHIL: That’s right.

PETE: I didn’t get you anything for Boss’ Day. When’s Boss’ Day?

PHIL: I have no idea.

PETE: I don’t know. I am a disappointment to most people I know. I think a lot of college students miss the opportunity to have a long-term impact on their financial life by wasting the money that they earn during the summer. My theory’s always been very, very simple and I will start with this. You work during the school year to fund your lifestyle and living expenses. You work during the summer to defray the cost of tuition. I believe summer income, ideally trying to accumulate three to $4,000 per summer of work. Should be used to pay for tuition not to superfund a great time that starts in August. Alex, how have your strategies changed in that regard?

ALEX: Mine is different in the fact that I don’t work during the school year. I haven’t been able to with extracurricular and things like that. So my income during the summer is pretty much strictly towards living expenses. And honestly going into senior year, the fact now is I’m probably not gonna be putting much towards tuition until after I graduate. So I’ve kind of accepted that fact. And I just save a portion as much as I can during the summer, but the vast majority of it is going towards living expenses.

PETE: Phil what was your experience when you, again, I know you had a long-term relationship. You always found yourself driving to Florida from Indiana every other week. But were you using a lot of the earnings you had over the summer to fund those sorts of things or did you fund it to help pay for college?

PHIL: I probably did use a little bit too much of my summer pay to fund the trips. And I didn’t, I wish I would have realized that I should have been using that money towards paying off some of my tuition, some of my student loans that I had. I mean, fortunately one thing that I did do during college that helped me out was that I was an RA for three years. So I had a free room every year which was fantastic, and it did give me a little extra pay too they gave us a little stipend. But I mean really that shouldn’t be an excuse for me doing the lifestyle that I had while in college. It should have been a reason for me to be able to save more.

PETE: I think what people need to do and sometimes, it really is just as simple as hearing this tip and then applying it. Calculate, how money you’re gonna make during the summer. I mean, setting a goal is one thing but sometimes you can’t control that. And I know our summers are supposed to meant relaxing and not dealing with academics well guess what you’re not you’re working. In many situations even the most intense internships are not academic in nature they’re practical and applicable to what you’ll be doing. So you do not have that same sort of academic burnout that you’re gonna have during the school year. So I think you’ve got to leverage that free time, which isn’t really free time. To be responsible and defray the cost of college because those times when you can gain experiences. Your only goal frankly, is to make May, your senior year, a lot more pleasant. Because when you walk across that stage, you shake that hand, you grab your Diploma, your family inappropriately cheers for you when they shouldn’t, when they were told to wait till the end of the applause. Is that how it still is Phil?

PHIL: Absolutely. Yeah the air horns or whatever that’s still big big thing during graduations.

PETE: I think in every graduation in the history of any level they always please hold your applause to the end. And it’ as disregarded as the don’t have your music playing on a plane prior to takeoff. Like it’s universally disregarded.

PHIL: Absolutely. Do you ever cheer?

ALEX: Like I love it. Yeah, it’s awesome.

PETE: Of course. I get annoyed by it. But the thing is, you’re trying to make your education as valuable as possible. And you do that when you don’t have debt after college. So 3,000 bucks. Phil, you’re gonna know this more than Alex and I will. What kind of dent can three grand, three to four grand put into a tuition bill at one of the universities that Indiana University is part of?

PHIL: I mean, that’s a huge deal.

PETE: Huge.

PHIL: I mean, if you’re looking at cost of attendance and I don’t have the figures right in front of me. But I mean, we’ll say more or less, you’d be able to cut about a fifth of the cost of attendance for a semester.

PETE: Yeah?

PHIL: Yeah. Just, that is a huge, huge amount of money that you can put away that you don’t have to pay off later that’s not collecting interest. That’s the big thing for me is had I’d been able to put some of this money away that I got during my summer jobs. I would not still be paying off those loans now. And we are, make sure I get this right, we’re seven years past me graduating from college. And, I would love to have those loans gone, but they’re not because I chose to spend the money, as opposed to save it.

PETE: All right, Alex, we’re going to act like we’re in an infomercial. I want you to act like a high school senior, and I’m approaching you at the mall. This is setting up to be a little creepy.

ALEX: Yeah.

PETE: Isn’t it?

ALEX: Just go with it.

PETE: All right, thank you. I was hoping. Then it got weird. What if I told you that I could reduce your student loan amount by $12,000. Is that something that you would wanna do?

ALEX: Definitely. And also probably I’ll be like what's the catch?


ALEX: Especially if you’re approaching me in a mall.

PETE: I have a van.

ALEX: Hey you. [LAUGH]

PETE: The reality is, if you work for four years prior to each fall term, And you earn $3,000 you’re gonna reduce the amount of student loans you take out by $12,000. And that has nothing to do with what you actually end up paying with loan interest in ten years repaying that $12,000. This is a no brainer that unfortunately people aren’t thinking about and aren’t doing.

ALEX: It also makes me jealous in a way because I don’t work during the school year so my money I make in the summer kind of has to go towards my living expenses. I would love to be able to get a head start on paying off those student loans because the interest, I mean it’s so huge. Especially we talked about amortization and how much your actually taking off the principle amount in a recent weeks. But it’s such a huge thing if you can get that out early, and it's looking forwards which a lot of kids in college don’t do enough but it can help you so much.

PETE: Phil as student loan amounts balances become and remain one of the hot topics in higher ed. I look at this conversation. And I think kids are shooting themselves in the foot by not considering this to be a solution. I mean it takes extraordinary effort to get extraordinary results. And unfortunately the ordinary is to have $26,000 in student loan debt. What I’m asking you to do is to reduce that by $12,000. What’s the disconnect?

PHIL: I think it all goes back to what the perception of the college experience is. And part of the college experience is, I go to class from September until May. When May shows up, I’m taking a break from all of this because I’m burnt out. So I'm gonna take the next couple of months off just kinda decompress and I’ll be ready to go again when September rolls around. And I think we need to kinda change that perception that going to school also means having a job in the summer. So you could build on what you’ve already learned and take that to the next level when you’re all around. And so that way when you do graduate you have less debt, you're more experienced, you have that job that you’ve always wanted. And you can either pay off whatever loans you have, or you won’t have loans to pay back and you’ll just start saving money. And having the life you wanted to live because you did all these things during your new, kind of, the new college experience

PETE: Alex, I need your math. How’s it feeling?

ALEX: Good. We’re feeling good.

PETE: Here we go. Let’s say you’re in school for nine months a year, for four years. How many months is that?

ALEX: 36.

PETE: 36. So, you keep the 36. This is group math. Have you ever done group math? Well here it is. All right so, you are in school though for, or your college experience is four years long which is 48 months. So, what’s the difference between 48 months and 36 months?

ALEX: A year.

PETE: So, if you do not work and fund part of your college education. You waste a year of your life. So you waste a year of your life not in school doing nothing. That’s harsh.

PHIL: That’s a pretty fantastic point.

PETE: Math works.

ALEX: It really is yeah. That’s kinda freaky. I hadn’t thought about that before. I don’t like that.

PETE: So it’s not that well I’m finding myself. No, no, no, you’re finding yourself doing Jack Squat, not Jack Tharp, Jack Squat for a entire year. And putting a burden on your financial life upon getting out of college which took you 36 months.

ALEX: Yeah and going back to what Phil said about what the college experience is stereotypically supposed to be. And I see that all the time. And I mean it happens to me. And I’m not saying it’s the right way it’s just what it is, is people make decisions purely in the present. Other than getting a job in the next summer, it’s purely in the present. I can’t count the amount of tweets, the amount of conversations I’ve had with friends who say, man, I gotta check the bank account I had $14 left this morning. And that’s it. And that’s all they have. It’s crazy the amount of just present-time thinking that we actually do in college and how that can hurt us.

PETE: To fix this, for more tips like these, you’ve got to go to This has been by way, Phil, thanks for joining us.

PHIL: Absolutely.


PETE: Alex, thank you to you and to me [UNKNOWN]. This has been How Not to Move in Back in With Your Parents. Here on the IU MoneySmarts Radio network.