The day-to-day management of your money can look pretty different depending on the career path you've picked.
Here, we’ll be focusing specifically on personal finances for teachers, and how to navigate your unique situation.
The career of an educator comes with its own unique sets of challenges native to the environment. Things like irregular pay schedules, work cycles, work-related expenses, tax deductions, and even retirement planning intricacies are vital to understanding and growing your financial wellness.
Many teachers work nine months a year, and get paid a yearly salary based off of this work time. The benefit here is you have three months free to explore opportunities, while the downfall is that some contracts only pay teachers during the school year.
Some school systems allow educators to opt in to receive paychecks throughout the year but at a lower amount (12-month pay option).
If this is not offered, it is essential to set aside 5-10% of your monthly paycheck while working to create a buffer of funds for the unpaid summer months. Deposit these funds to your HYSA (high-yield savings account) for an extra bump in interest income!
Although it may be fulfilling, the job of a teacher isn’t widely known to be one of the most well-paying careers out there. The average salary for teachers in the U.S. is around $66,000, or about $2,100 per month after taxes depending on where you live and your tax situation.
Teachers will often purchase supplies beyond what the school budget covers. If you buy your supplies out of pocket, check if they qualify for tax deductions.
Investing in continuing education helps teachers master new technologies and deepen their subject matter. You can utilize education tax credits and district incentives for your professional growth. While it might cost upfront, the long-term payoff can be substantial.
Teachers can access discounts on various insurance types like car, homeowners, and life insurance, as well as mortgage programs, credit cards, child care assistance, and debt support.
Maximizing these discounts and opportunities can add up big time, cutting your expenses and improving your budget for the better.
Let’s start with the basics — what does budgeting look like for a teacher?
Since educators are usually paid on a fixed income, it is essential to begin by assessing your monthly income and listing out all your regular expenses such as rent/mortgage, utilities, groceries, and transportation.
Breaking things down on a monthly basis is essential as these expenses need to be paid all year long.
Open up a high-yield savings account where you can deposit a portion of your monthly funds and gain anywhere from 2-5% interest at online banks while your money is set aside.
Deposit your monthly savings and summer funds into this account to cover emergencies and build a nest egg for the summer months.
Teachers have access to a range of retirement accounts that they can choose to participate in. Additionally, some districts may have pension plans and even provide health savings accounts as an incentive.
As a teacher, you have various retirement plan options with different benefits, based on what type of organization you work for.
Teachers in the private sector would typically be offered a 401-K, while those in the public or state sector would be offered a 403-B and/or a 457 plan.
With any investment vehicle, actively monitoring and managing these investments is key to making sure your financial endeavors are working for you.
Aside from retirement investments, Doing Well can help you determine what other investment strategies are right for you as a teacher, and how they contribute to your holistic financial picture as a teacher.
Teaching is more than just a job - it's a profession that has the ability to profoundly impact lives. But without careful financial management, the stability it offers can falter. Doing Well aligns with teachers on one thing - our goal to be your trusted partner in personal finance.
We understand the distinct financial challenges teachers face and can work side-by-side with you to create a personalized financial, fine-tuned to your needs so you can throw away that cookie-cutter budget.
Help cultivate the growth of the next generation and leave the financial stress to us. Let Doing Well be your trusted power in financial empowerment. Let’s create a financial plan that sets you up for success, both in and out of the classroom.
