What do we need to know about summer jobs?
There are two reasons we are talking about summer jobs. First, a lot has changed since we were kids. What teens and young adults do during the summer has become much more varied. But more importantly, for those who have kids who do have summer jobs, it can be a great opportunity to instill sound financial habits that will benefit them for the rest of their lives.
How are today’s teens spending their summers?
The standout here is that a much smaller number are spending them working. In fact, the Bureau of Labor Statistics found that the majority of American teens aren’t looking for a summer job at all. According to the BLS data, just 43% of 16- to 19-year-olds were either working or looking for a job in July 2016 — down 10 percentage points from 10 years ago.
Instead, it seems that many teens between 16 and 19 are focusing on their educational future rather than financial gain during the summer. And the BLS data supports this theory, showing that in July of last year, over 40% of 16- to 19-year-olds were enrolled in school. Basically, more teens are spending their summers preparing for college applications or college by enrolling in summer courses or studying for advanced placement classes. The BLS says this could reflect heavier academic workloads and longer academic years.
Is one option better than the other?
Not at all. Studies show that summer jobs build confidence and time management skills, in addition to the financial benefits. Additionally, everyone has to start somewhere, and everyone needs a first job on their resume. And remember having a summer job and continuing your education are not mutually exclusive.
If teens are not working summer jobs in such great numbers, who is filling those positions?
Employers still need seasonal help and the demand for summer workers has continued to grow. Careerbuilder.com found that 41% of employers are looking for seasonal workers this summer. And it seems that older Americans are meeting the demand. The Pew Research Center stated that more Americans ages 65 and older are working “than at any time since the turn of the century.” A full 18.8% of this age group were employed full or part-time.
If our kid does have a summer job, what advice would you give them?
A study by America Saves found that if teens stick to a few key rules when they get a summer job, they will build a foundation of sound financial habits and build savings. The first rule is to come up with a savings goal and write it down. The America Saves study found that savers with a plan are more than twice as likely to make good or excellent progress meeting their savings needs.
Your goal should include specifics, such as what you’re saving for, how much you will save each month, and how many months you will save for. Another important, and straightforward step: use direct deposit. By setting up direct deposit through your employer, you will avoid fees for things like cashing checks, making deposits, or checking your account balance, and you won’t be tempted by having cash burning a hole in your pocket.
Finally, try to save automatically. If your employer offers direct deposit, it’s likely they can split your paycheck between a checking and separate savings account. This will help you stick to your saving goals. If split direct deposit is not an option, you can set up automatic monthly transfers from your checking account into your savings account by contacting your bank.
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