Being an educator is one of the most rewarding careers a person can pursue. It takes dedication and passion to teach the youth of a community, but it can also leave your paycheck hanging in the balance. Between funding your own classroom and being paid significantly lower than other careers, teachers are left with a lot to be desired when it comes to their money. After spending a majority of the year pouring into your students, the best way to pour back into yourself is to take care of your finances. The quickest way to start? Learning how to optimize your paycheck through budgeting techniques, identifying your financial goals, and putting a plan to reach those goals in motion. These habits will help you become financially stable both at home and in the classroom, during the summer months, while class is in session, and every day in between!
50/30/20 technique
For most people, budgeting isn’t difficult, it’s turning it into a habit that takes the most effort. That’s where the 50/30/20 method comes in. It’s a structured way to begin budgeting that is straight forward and helps you build your funds one paycheck at a time. Each number in the technique is a percent of your income that you allocate to one of your financial goals. 50% of your paycheck goes into your savings for things like emergencies, bills, and general fund building. While it may seem like a lot, these non-negotiables are important to cover each month to avoid late fees, debt, and damaged credit.
30% goes towards the things you enjoy, like a coffee on your way to work or a new pair of shoes. Everyone has things they like to buy themselves, so villainizing that type of spending isn’t productive. The best way to keep from going overboard on these types of purchases is to work them into your budget rather than cut them out entirely. The last 20% is dedicated to debt repayment, whether that be loans, a mortgage, or a credit card. What makes this technique successful is staying dedicated to the percentages of where your money is going. Keeping up with a budgeting technique creates a habit that optimizes your paycheck and begins your savings journey.
Setting Financial Goals
It’s easy to tell someone to budget, but what exactly does that mean? A significant portion of budgeting is identifying your financial goals so that you can determine A) the time that it will take to achieve them, and B) the funds needed to get there. But creating a plan to set those actions in motion can be difficult when you aren’t confident about what you’re working towards. A sound step to take after you’ve pinpointed your financial goals is to label them as short term or long term.
Short term goals revolve around things that can be achieved sooner rather than later, and are less daunting than long term goals. Have bills each month that you need paid? Set aside a portion of your income to guarantee that they are. Need gas on your way to work? Keep a sum of money in your savings that you know can cover it. The fruit of those labors won’t take as long to produce as a long term goal, such as paying off a loan, but they can help you create the habit of saving.
Long term financial goals usually revolve around payments that are larger and more structured. They include paying off vehicles, homes, student loans, and any debt you may have accumulated. Having a lot to pay off can quickly become overwhelming, so start small. Need money for the upcoming school year’s calculators? Set aside a chunk of your income during the summer months. Once you identify your financial goals and determine whether they are short or long term, they begin to feel less conceptual and more realistic to achieve.
Getting Out Of Debt
If you’re an educator, there’s a good chance that you have some existing debt in the form of student loans. But debt can also be accumulated through having a vehicle you have to pay off, a mortgage in your name, or any credit cards you use. Most adults have multiple avenues of debt, and it’s important to make an effort to eventually get out of any existing debt that you may have.
This is always easier said than done. But the best advice for efficiently getting out of debt? Any effort is better than no effort. If you know you want to begin making payments towards debt you have, but the amount you owe is large, work with your borrower to create a payment plan that you can contribute towards steadily over time. Consistent payments, even in smaller amounts, are a great way to begin chiseling away at your debt without leaving your budget empty for your other purchases. Set yourself up for success by being realistic with yourself, with the amount that you owe, and the goals that you have for yourself in the long run.
School Year Budgeting
Because teaching is a seasonal job, that means educators have a whole chunk of the year that they can dedicate to budgeting for when they’re back in the classroom. During the summer months when school is out, consider using time to your advantage and learning how to incorporate things you need for the school year into your daily saving practices. This would be a great time to experiment organizing your paychecks using the 50/30/20 method, or any other budgeting method that will help you organize your spending.
It’s common for educators to get a second job during these months as well, adding income to their budget and allowing them more funds to contribute to their financial goals. Whether you have one paycheck or two during the summer, when school is out is a great time to develop budgeting habits that can set you up for success in the upcoming school year.
As an educator, establishing a budgeting structure around your paycheck allows you to have a strong financial foundation that can be built upon throughout the school year. It helps you create an understanding of your financial goals, break down your funds based on those goals, and initiate a plan to accomplish them. By optimizing your paycheck, you (and your students!) can reap the seeds sown of a successful life outside of the classroom.
Education is not preparation for life; education is life itself
-John Dewey
