You didn’t get into this for the money. I know that. But I also know that money matters. It’s how you fund your aspirations and how you gain independence. Nobody wants to talk about money. It’s awkward—like talking about politics. But if you are a public school educator I could quickly find your salary based on where you teach . Are you Nationally Board Certified? Do you have a Masters? Doctorate? From these facts your salary is public knowledge. According to Payscale.com the average salary for all K-12 teachers is $44,439. We receive incremental raises, based on aging and the occasional higher degree (you can only get so many of those). If you stay in your job, you will plateau at your final salary level after 25-27 years.
In my quest to learn more about finances I’m fascinated by this idea of negotiating for a raise. It’s something that as long as I’m in education, I may not learn how to do. But I do think that as educators, we are worth so much more than we are paid. The value we provide to families and to society is immeasurable but you wouldn’t know it based on teacher compensation practices. This blog post won’t teach you how to negotiate your salary. Unfortunately that’s just not an option for most of us, and I couldn’t give you any good advice on salary negotiation in the first place. But the advice I can give you is how I wish I had managed my finances over the last 10 years in education in the hopes that you can avoid my mistakes, or join me in the late bloomer's club.
1) Plan for Retirement
As soon as you start teaching part of your paycheck goes into your Teacher’s Retirement System. You make decisions early on about how much you want to go in and then you never have to look at it again. This automation is nice, but it is problematic in that you don’t have to actively engage in your finances. You should know what you are contributing to your TRS and monitor it just as you would any other accounts. You should also look in to additional retirement savings you can contribute to. In Alabama, it’s the RSA-1 (a 457 deferred compensation plan) which allows you to make tax-free contributions to buffer your retirement savings. In addition, you should try to understand the vesting system in order to maximize the amount of money you put into your retirement.
2) Actively Monitor Your Finances
In Mint.com you can create accounts for your retirement, other investments, your paycheck, credit cards, and any other income or spending. This will help you manage all of your assets. It is also a helpful tool for budgeting and financial goal-setting. Nicole Lapin’s book Rich Bitch has some helpful tools for creating budgets and spending on the things that are important to you without guilt.
3) Manage your subscriptions
I learned this trick from Ramit Sethi’s book I Will Teach You to Be Rich. I cringe at the thought of how many subscriptions I let go unnoticed. Tiny things like that 3.99 subscription to streaming music or the one time annual fees can add up. In an audit of subscriptions I actually found a dating site subscription that was still on, 7 months in to a new relationship! The horror. Go through your credit card and debit card statement and make sure you are actually using those subscriptions, and determine whether there are any you can do without.
4) Find a side income
This advice comes from James Altucher's podcast: You can only save so much money. If I set out to save 1,000$ the most I can save is $1,000. But if I set out to make $1,000 that might just be the beginning. One of the best ways to set yourself up for financial success is to discover other sources of income. Passive income is the best kind, because once you have an available product and people are buying it from you it does not have to take up your time. The best tool I have found for educators to build passive income is Teachers Pay Teachers. You can create products that you can actually use in your classroom and that other teachers will buy! TPT is a remarkable innovation for our field, and I suggest that you set up shop and share your talent with the world, all the while being paid for it. You can also get paid for your expertise. I have many teacher friends that tutor, do adjunct work at local universities, or babysit. Do you like to write? Some education publications pay educators for their expertise, like Noodle.com, who has “Noodle Experts” that are compensated for their work. It’s time we step up and are paid what we are worth.
Finance intimidates me, but I believe that with the right teaching and learning, anyone can learn anything. So I’m playing catchup right now for 10 years of financial neglect. I am very fortunate to be brought up in a financially responsible family with parents who taught me to manage money, but I still have a lot of learning to do. One thing I’ve learned from reading about getting rich, is that being rich isn’t always monetary. It’s buying yourself the time and having the resources to make your dreams come true. Two of my favorite retired teachers are living the richest lives of anyone I know. One is a retired 3rd grade teacher who is a travel photographer in Paris. The other, a retired gifted education teacher goes on an annual archaeological dig in Bulgaria. A rich life is not beyond our reach as educators if we plan early, work hard, and dream big.
Each New Years it is so tempting to make ambitious plans for the year. Lofty New Years resolutions haven’t worked well for me in the past. I can’t tell you what last year’s resolution was because I likely stopped doing it in February or March. There is so much noise about how to improve yourself and our newsfeeds are filled with life hacks and productivity tips. We are bombarded with resources on how to live better and at this time of year there is pressure to make big goals and to stick to them.
This year I propose a new kind of resolution. For each month of 2016 I’m selecting a focus area. In this focus area I will set goals and actions around learning and improving myself in that area. For January I’m going to focus on finance. I spent a good deal of time in 2016 improving my financial literacy, creating budgets and long term planning. In looking over my post-holiday Mint.com trends I can tell that I still have some work to do. this month I will be learning more about managing my finances and sharing what I learn with you. Other potential focus areas could be: home improvement, organization, fitness, career, family. You will know what you need to prioritize.
Here are some ideas for getting focused on a specific area, and some action steps you can take to make the most of each month.
1) Learning: Reading books, listening to podcasts, taking a Udemy, Skillshare, or Coursera course
2) Measuring: Is there a number you can reach to create goals for yourself? For finance, that might be: Save x amount of money or make x amount of side income.
3) Habits: Is there something you could do each day or week that would help you improve in your focus area?
4) Accountability: Is there a friend or family member that you know is working on the same thing? Check in with one another along the way.
5) Journal: Keep track of what you are working on by journaling about it or keeping up with data (If you are working on time management, track your time for two weeks. For finance, see where your $ is going)
At the end of the month you will have learned something new and potentially created a new habit that will last throughout the year. You will stick to your resolutions without giving up on them because they will be manageable. 31 days is much easier than 365 days. I look forward to what we can learn together in 2016.
Education careers are tough. These entries are dedicated to making the lives of educators easier and empowering those who have chosen this path to reach their potential in work and life.