Post Roundup: Money Advice for Teachers and Educators
Of all the hard jobs around, one of the hardest is being a good teacher.
Today’s post is a little different. It’s a roundup post of money advice for teachers and educators. For majority of my posts here, I’ve written from the perspective of someone who was in the corporate world. By nature, being in the corporate world has it’s own unique system, terminology, career ladder, retirement, etc. After reading the TIME piece “13 Stories of Life on a Teacher's Salary” late last year, I was aghast at how little we pay and pay attention to the people that are shaping our children’s future.
My only experience as a “teacher” is through technical trainings I’ve done in the past (for adults) and through my time volunteering as a teacher’s aide (for first graders). These were mostly short lived interactions and none of it compares to the time teachers put in to their curriculum before class, the time they put into managing children and young adults in class, and the time they put in after school to review work, tutor and continue to help kids. So it boggles my mind how we continue to place such little value on teachers.
To that effect, I think it’s equally important that teachers also take it upon themselves to do what they can to get themselves financial independent. Now since I don’t have much experience in that department, I’ve rounded up some posts from fellow teachers and educators. According to an edweek.org article for 2017, about 77 percent of teachers are women, I find that it is equally important that young teachers early on learn the value of money and how to make it work for them. Read 5 Reasons Why Women Need to Think About Financial Independence Differently.
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PrincipalFI and his wife are both educators. They started out as new teachers with $130,000 in debt. They poured ourselves into the work they were passionate about while completely neglecting their finances. Ten years later, in their 30s, their total net worth was $0. They had no debt, but also had missed out on years of investing. Through the good fortune of a strong economy and using their educator income options, they made progress. Read more about their journey over at Principal FI.
I can see many teachers/educators that might be in the same boat as Principal FI, especially for those that have chosen to pursue Masters in Education and taking with it thousands of loans. I especially like their article “The 15 Money Things I’d Tell A New Teacher” as it details a lot of great money advice for teachers but for everyone else. I especially like advice #2: Don’t Fall for the Poor Teacher Myth. Sometimes it’s all about mindset and reconditioning our thoughts away from cultural norms.
Do you know what your money mindset is and who or what influenced it? Check out this short video to learn more.
This next article is from Smart Money Mamas. This one talks specifically about the 403B which is the retirement plan for non-profits, public workers, ministers and other select individuals. This is kind of the equivalent to the 401K in corporate. This is a handy post to keep because for many teachers, the retirement conversation may be lacking especially as you start working.
With the disappearing act of the pension plan and the draw down of Social Security, contributing to a 403B plan can mean a huge difference for securing a well funded retirement lifestyle. While it’s admirable to be a teacher, remember that the biggest form of self-care is also ensuring financial security for yourself and your family.
The Millionaire Educator documents a teaching couple’s journey towards breaking the $1 million net worth. They started tracking back in 2002 and they show a breakdown of year, savings and net worth over time as well as the career moves they made over time to get to that amount. Read more here. This is just proof that growing wealth takes time, deliberate actions and smart investing. There’s a great post on “How to FIRE on Two Teaching Salaries in 7 Years or Less” that breaks down more tips on how to reach financial independence. As with anything don’t be turned off my the numbers, adjust it accordingly to what you have, but work to earn more to get to that savings rate that much higher. In a similar post, they also talk about how they have come to be high earners in the education field. Find those suggestions here. It’s best to start off with a plan because at least you can concentrate your energy and your money towards that. Without a plan, you’ll spend and save without a true purpose making it more difficult to reach the financial independence destination.
Other Posts from Millionaire Educator worth reading:
ChooseFI Episode 13: Millionaire Educator Shares the Secrets of the 457b
I’ve greatly enjoyed reading many of the posts over at His and Her FI. In one particular post, Bethany runs through some of the expectations of educators and the injustice that supports and continues to promote low pay. On the other hand too, she reflects on her life as a broke teacher and how they are tackling money management and pursuing financial independence regardless and meeting success. The big thing is not to continuously compare yourself to others, but to chart your own plan and follow through it. You have to define your own version of success.
I thought this was an interesting thread to follow because it shows you lots of real life examples of how other teachers and educators are learning from the system, making use of what’s available and thinking outside of the box in the pursuit of FI. Some of the topics may be brand new to you, but we are all students at one point. Don’t dismiss an idea just because it’s brand new. See if it can work for you and try it out. The best scenario is more money in your pocket and a healthier view of money moving forward.
I hope this has been helpful. If you are a teacher and blog about your journey to financial independence, please share with me your article so that I may add this it to the list. If you are teacher and the concept of financial independence is new to you, please feel free to share your whys and your action plan below.
I once heard that teachers are not in the “look the part” culture. This may help teachers in the pursuit as the pull to keep up with the Joneses isn’t as strong, but knowing that it may not be easy to also increase income via wage increases means that teachers have to think outside of the classroom when it comes to earning more income.
I’ve heard of teachers pursuing side hustles like my friend Becca, taking on other roles in school like coaching sports, tutoring online or creating products and selling it on Etsy.
If you are new to the financial independence movement, I suggest reading this article. I then suggest grabbing The Money Journal to help you track your financial independence journey. It’s a money workbook/journal with lots of action items, checklists and money tips.
I also recommend Personal Capital for tracking your finances. It’s free and allows you to not only track your net worth, but also day-to-day transactions and figure out which of your investments are eating up your fees. Find the full review here.
The Money Journal is a hands-on guide for you and your money. This journal is based on exercises from over 30 money books to help you understand your money mindset, plan a debt free strategy, increase your net worth and figure out how to make your money work for you. No matter what your goals are, let 2019 be the year you take charge of your financial well-being.
PDF version will be delivered when the journal ships.