Well everyone, it’s that time of year again. The weather is getting better, the days are getting longer, and finals week is just around the corner. Prepping for finals week is just one of the steps we all need to take to prepare for the summer months ahead. If you were lucky enough to land a summer internship there is plenty to think about before you head to your new job on day one including, budgeting, finding a place to live, and comparing living costs in a new city.
Budgeting is step one of planning for your financial future. If you are lucky enough to have a paid internship then you will need to determine how to use your new found income. If your internship is paying you with a fantastic experience then you will need to plan how to live off of built up savings. Some important things to consider is how you are being paid.
- Hourly: If your income is based on an hourly rate, then your income estimate must reflect your hours of work each week multiplied by your hourly wage. Then multiply that amount by the number of times you are paid each month (twice for bi-monthly, four times for weekly) to compute your monthly income, less any withholding from your paycheck.
- One-time payment: If your payment is a one-time stipend then you will need to plan how to utilize that total over the next few months. A good method is to divide the total you are being paid after withholding by the length of the internship in months. This calculation will determine the amount you can afford to spend each month throughout your internship.
Powercat Financial’s spending plan worksheet is a great resource to get you started with the budgeting process. Step 1 will have you estimate your income and expenses in a given month. Step 2 has you record the actual amount of income and expenses you had for that month. Then, you complete the budgeting process by setting your budget based on the information you gather while comparing your estimates and actuals. The spending plan worksheet is available on the Powercat Financial website under the Budgeting tab.
Finding a place to live
Finding a place to live is often the toughest part of an internship. It’s important to consider not only overall cost but also your individual needs. If you aren’t able to live with family or friends in a new city, there are still other options available. The main housing options I will discuss today is intern housing offered by the employer, long term Air BNB reservations, or standard rent.
- Intern housing: Often times your employer will have a predetermined housing option. This is a great way to meet your fellow interns and often comes at a cheaper rent than what you could find on your own. A downside is the preset housing may not have all the same amenities you could find at other locations. Often the employee housing could be campus dormitories of a nearby school or even a long term stay hotel. It’s critical that you consider what is most important to you and that you thoroughly evaluate the options presented.
- Long-term Air BNB: This is another option that has become more prevalent in the last few years. When selecting an Air BNB or similar option you will need to make sure that all your needs are met and that the host can house you for the full length of the internship. Additionally, always use caution when evaluating Air BNB hosts.
- Standard rent: Another option is renting. Whether it is a house with some friends or just an apartment by yourself or with another intern this is a nice option. A few things to look for when searching for an apartment over the summer is to find one that has a lease for only the month’s you will be living there. This allows you to avoid paying rent for times that you aren’t using the space.
Comparing cost of living
Finally, you will want to be aware of any changes to cost of living based on the city you will be in. A great resource to make this comparison is the cost of living comparison from Bank Rate available here: https://www.bankrate.com/calculators/savings/moving-cost-of-living-calculator.aspx. This calculator allows you to put in a salary in one location and it will determine the salary you would need in a new location to maintain the same style of living. Additionally, great detail can be found about housing prices, food prices and much more.
These are just a few of the things you need to consider before starting on day one of your new internship. Starting a new role, possibly in a new city, can be a stressful time but Powercat Financial is here to help. If you would like to come in and discuss a job offer, living in a new city, or any other financial topic just visit https://www.k-state.edu/powercatfinancial/ and select the request appointment button.
Good luck on finals and best of luck this summer!
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