By Teachers, For Teachers
Oftentimes, we in the teaching profession are so busy with our students and our personal lives that our finances get overlooked. Whether you are just getting started in the teaching profession or thinking about your retirement, it’s essential that you financially plan for your future. We asked veterans from the teaching profession what their financial planning strategies were, and this is what we found.
The first thing that you will want to do is to examine your finances. This means that you need to take a look at all the money that is coming in as well as going out. You can download an app that can help you see what you are spending. Your goal is to spend less money than you earn. This will help you be prepared for emergences as well as your future.
Let’s face it, teaching is not the highest-paying profession, but we do pretty well for ourselves. With that said, if you want to live a nice life as well as be prepared for your future, then you have to be financially smart and budget. Since debit and credit cards have been replacing cash, people tend to make more impulsive purchases. Set a monthly budget and follow it. Some banks even have an online tool that can help you create a budget as well as track your monthly expenses.
Once you have an idea of how much money is coming in and going out, and you have created a budget for yourself, next you can organize your finances. Buy a three-ring binder and organize everything that has to do with your finances. Keep all of your receipts and other important paperwork in your binder and put it into a fireproof box. Keeping organized will help you better financially plan for your future.
If you think that you’re the only one with credit card debt, then you are wrong. According to research, an average of 127 million Americans carry credit card debt with the average debt per person being at $3,971. While these statistics may make you feel physically ill, they are the truth. Line up all of your credit cards and research which ones have the highest interest rate. Then start with the one that has the highest interest rate and pay that one off first. Once that is payed off, move to the next one, and so on. When they are all payed off, don’t close them (it can affect your FICO score), but choose to use one wisely by paying it off entirely each month.
As a teacher, you may be eligible for the teacher loan forgiveness program. This will forgive up to $17,500 of your Direct or FFEL Subsidized or Unsubsidized Loans after five consecutive years of teaching at a qualifying school. If you teach at a low-income school, you may be qualified to receive 100 percent forgiveness from the Perkins Loan Cancellation for Teachers. If you don’t qualify for either of these programs, then you may be eligible for the Public Service Loan Forgiveness (PSLF) Program, which will forgive the remaining balance of your Federal Direct Loans after 120 qualifying payments, or about 10 years. If you are ineligible for any of these, then you can just try and pay down your bill each month with as much money as you can.
Teachers usually have great pensions, but you can’t entirely rely on that when you retire if you want to maintain the same standard of living that you are used to right now. Consider opening a Roth IRA for a tax-advantaged retirement savings. You are essentially making money while you sleep. Try and put about 10 to 20 percent of each paycheck into savings or even more of you can. In the future, you will be grateful you did.
Getting your finances in order and investing in your future will not only give you a peace of mind, but it will allow you to have a wonderful retirement. All you have to do now is simply follow these financial strategies for teachers and you will be ready for a bright future.
Do you have any financial planning strategies for those in teaching profession? Please share your tips and strategies in the comment section below, we would love to hear your ideas.
Janelle Cox is an education writer who uses her experience and knowledge to provide creative and original writing in the field of education. Janelle holds Masters of Science in Education from the State University of New York College at Buffalo. She is a contributing writer to TeachHUB.com, TeachHUB Magazine, and Hey Teach. She was also the Elementary Education Expert for About.com for five years. You can follow her on Twitter @Empoweringk6ed, on Facebook at Empowering K6 Educators, or contact her at Janellecox78@yahoo.com.