Learn How You Can Get an A+ on Your Financial Future
Teachers invest so much of their time, energy, and even money into their work. According to the National Education Association, public school teachers spend hundreds of dollars every year to purchase classroom supplies out of their own pockets, and 9 out of 10 teachers are not reimbursed for that expense. This means that, in addition to salaries that don’t reflect the gravity and depth of their work, many teachers are serving their students at a personal cost to their bank accounts, too. This is just one reason that teacher financial planning is critical to your future.
If you find yourself in this situation, know that thoughtful planning can help put you on a path to greater financial security. The teacher financial planning tips below can help educators make smart financial decisions today that can give them more peace of mind for tomorrow.
Tackle Student Loan Debt First
It takes a great deal of education to become a teacher, and with that training often comes significant student loan debt. It can be a very serious financial challenge, one that can deeply impact your financial wellness. Thankfully, there are valuable resources available for teachers looking to decrease their debt. In some cases, student loans may be able to be forgiven altogether.
- Teacher Loan Forgiveness Program: If you teach full time for five complete and consecutive academic years in a low-income school or educational agency, you could be eligible for forgiveness of up to $17,500.
- Public Service Loan Forgiveness: You could qualify for forgiveness on the remaining balance of your direct loans, if you’ve already made 120 qualifying monthly payments and work full-time for a federal, state, local, or tribal government or nonprofit organization.
- Perkins Loan Cancellation: If you’ve served full time in a public or nonprofit school as a teacher serving low-income families or special education students, you could qualify for cancellation of up to 100% of your Federal Perkins Loan. Partial or full loan cancellation may also be available for teachers who specialize in subjects experiencing teacher shortages.
Even if you aren’t able to get your student loans forgiven completely, there are other ways to tackle this kind of debt. Make paying down your loans a monthly priority. Instead of paying your minimum payment, put as much as you’re able toward paying off your loan. Paying student loan debt more quickly means saving big in interest charges in the long run. Many loan servicers also shave off some interest for borrowers who elect to use a monthly auto-pay feature, so look into your loan terms and make sure you’re maximizing your pay-off efforts.
Build an Emergency Fund (Even if it’s a Small One)
You tackle the unknown in the classroom all the time, but are you applying those same skills to money management? Creating an emergency fund is one of the best financial decisions you can make. This is a bank account with money set aside to pay for unexpected expenses like medical issues, home repairs, car problems, or even unemployment. It’s a smart teacher financial planning move because it gives you a buffer in times of financial distress.
I know what you’re thinking – how can you possibly tackle your student loan debt, help buy needed supplies for your students, and save for an emergency all at the same time? Know that any emergency fund is better than nothing! Start with a goal of just $500, then slowly work up to between three and six months of your monthly expenses. Opt for a high-interest savings account to get the most bang for your buck.
Make Your Budget Your Best Friend
Thinking about your budget may be the last thing you want to do when you get home after a long day in the classroom, but it’s an important part of any teacher financial planning effort. Instead of thinking of it as a chore, think of it as a tool to achieve your goals.
Teachers often have more complicated budgets than other professions. You may have to account for things like classroom supplies and supplemental summer income, on top of more traditional considerations like debt, spending, bills, and necessities.
To plan your budget, here are some quick and easy steps to consider:
- Track your income and expenses
- Outline a budget, which should include fixed expenses, essentials, entertainment, utilities, and a fun fund
- Set realistic goals for yourself
- Save for any planned upcoming expenses
- Set up a long-term savings plan
- Use the right tools to help you plan in a way that works for you
- Renew and update your budget on a regular basis
When you get overwhelmed, as we all do at times, envision your short- and long-term goals and remember why following your budget is a critical teacher financial planning move.
Plan for Retirement Today
Teachers often have more options when it comes to retirement, from a state-offered pension plan to more traditional retirement funds like an IRA. The first step to take is to outline your personal retirement goals. Ask yourself when you want to retire, what you want your life to look like in your golden years, and how much money you’ll need to make those dreams a reality.
Once you answer those questions, put aside as much money as you can as early as you can, so you can see your wealth grow over time to meet your goals.
Teacher Financial Planning: Final Thoughts
Money matters can feel overwhelming, and it can be difficult to determine which teacher financial planning moves are best for your personal situation. However, as you’re putting energy toward your students’ futures, remember to plan for your own financial future, too. The tips above should help you start off on the right foot and give you the peace of mind you need to focus on the minds of your students.
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