I have been involved with teaching the last three years with the hope of making it a second career. As an adjunct teacher at a local community college, I do not get the financial benefits of a full-time tenured-track position. Teaching is not exactly a profession that will make you rich, but with some financial planning, you can achieve your financial goals and have a rewarding and comfortable life. I am a big believer in the saying “it’s not how much you make, it’s how much you save.” In this tough economic times, when many teachers are facing layoffs and furloughs, getting your financial house in order is a good thing. Here are 5 financial tips I have learned over the years:
Always sign up for your employer’s 403(b) savings plan, the teacher’s equivalent of a 401(k) plan. If you can afford to contribute the maximum allowed, do so. This is an excellent way to save for retirement. Money will be taken out of your paycheck without your even noticing it. Your contribution and the accumulated earnings are tax-deferred until withdrawn at retirement when you are in a lower tax bracket. Too young to think about retirement? Think of it as an investment, a way to build equity and long-term wealth. In addition to your retirement savings, it is a good idea to put $25 a month into a savings account for a rainy day or vacation fund.
Budget and Planning
We all envy teachers for their long summer vacations. They may get paid for ten months and find they have no income for the two summer months. In such a case, these teachers need to plan ahead and budget in some savings to pay their bills, or boost your income by having a summer job lined up.
If you owe a lot of money to credit companies, try to consolidate them into no more than two credit cards with lower interest rates. Be careful to read the fine prints. As we all know, credit card companies are notorious for charging exorbitant interest rates and late fees. Be proactive and pay your credit card bills on time, and try to pay above the minimum rate to expedite your debt reduction. I am not a fan of debit card, but if you have trouble managing your credit card bills, it might be best to use a debit card, and reserve credit card use only for emergencies.
If you have a habit of spending more than what you have coming in, you need to examine your credit card bills in detail to see where your precious money is going. Only then will you know what expenses to cut or minimize. This is the difficult part. Ask yourself these tough questions: can you drive that clunker a little while longer? Go out to eat a little less? Do you need that extra pair of shoes? Or your HBO? You need to seriously differentiate a need from a want.
Taxes and Financial Planning
Educate yourself on investing, taxes, and business and finance.There is a plethora of information on the web, or if you prefer, you can subscribe to a personal finance magazine like Money or Kiplinger. It will be money well spent, guaranteed!
These financial tips are very basic, and are applicable to any profession, not just teachers. Follow these tips to get your financial house back on track.