Full-Year Budgeting for Teachers
The school year within the United States public education system lasts about ten months, so some teachers face an interesting budgeting issue that most American workers do not.
The first issue is handling a below-average paycheck. Compensation for public school teachers varies wildly depending on years of experience and location, but for the most part throughout the country, starting teachers receive below-average compensation for their level of education. The pay may be accompanied by decent benefits and a pension, but it’s safe to say most people don’t go into primary or secondary education for the money.
Without getting into the reasons that compensation for public school teachers is low, a low salary requires thoughtful conservation of money. While many teachers are often part of a household that has two incomes, that isn’t always the case. The usual tips apply:
- Design a budget that works. A budget, particularly for a household whose expenses approach or exceed income, is essential for coming out ahead at the end of every month.
- Track your spending. Once you start paying attention to how much you’re spending on gourmet coffee or other unnecessary expenses, you will have a stronger ability to see room for financial improvement.
- Get out of debt. Student loans are often the first debt teachers must tackle. The typical path to becoming a teacher requires four years of college education. That is the minimum; higher salaries are often available to teachers who have a master’s degree. While there are often alternative paths to receiving a certification, most teachers have at least a bachelor’s degree in education. While there are ways to keep the cost of this education low, that might not have been considered while going to college. Thus, teachers often start out in a low paying industry with thousands of dollars of student loan debt. Start a plan for eliminating that debt as soon as possible.
Teachers work (officially) about ten months a year, and school districts have different methods of paying their teachers. These are the two main approaches.
- Teachers receive paychecks every week, every other week, or twice a month, even over the summer. This way the full salary is paid evenly over the entire year.
- Teachers receive their full pay spread across the ten months they work, receiving nothing over the summer.
With the second approach, a teacher would need to take care not to spend all income throughout the ten months he is working if he intends to spend any money throughout the summer. Mathematically, the best approach would be to save one-sixth of each paycheck in a high-yield savings account, smoothing out income to include the summer months. When the summer arrives, the teacher can create his own paycheck by withdrawing from the savings account.
Many teachers continue working over the summer, whether acquiring additional certifications or preparing lessons for the new school year. Some have secondary jobs outside of teaching in order to earn an additional income, as well.
Teachers who stay in the same school district for over a decade can often turn below-average incomes to above-average incomes, and those who choose to go into administration can earn even more money, but teachers who have only a few years of experience or less can struggle financially. A teacher could improve her finances by being aware of their income and expenses and by budgeting for the full year.