Teachers go into education because they want to make a difference in their students’ lives. Unfortunately, a passion for teaching doesn’t negate real-life financial responsibilities. A modest teaching salary can pose challenges, and stress around finances can exacerbate other forms of stress teachers are already experiencing in their daily routines.
Luckily, there are ways to budget your spending and increase your savings so you can spend more time doing what you do best: teaching. Money management doesn’t have to be complex; once you get started, it is easy to establish healthy routines that will set you up for a robust financial future.
Take a look at these six budgeting tips for teachers to help you get started.
1. Maximize Your Earning Potential
One of the best ways to build a better budget is to increase your earnings. As a teacher, you can pursue higher degrees of education in order to boost your earning potential over the span of your career. Many teachers who earn their master’s in education receive a higher salary, bonuses, and even stipends from their district. In fact, teachers with an MAT or MEd earn an average of $2,800 more their first year and can end their careers earning up to $10,000 more than they would have without a master’s degree.
Teachers can also increase their earnings based on their position and school setting. When teachers are applying for a new role, they make decisions about such factors as public versus private school, rural versus urban, grade level, and location. Each of these factors has an effect on total salary compensation. High-demand subjects such as special education (national average income: $52,770) and STEM (national average income: $46,110) also tend to pay more.
2. Build an Emergency Fund
Especially when you’re first starting out in your career and your savings are slim, you should prioritize building an emergency fund. Emergency funds prepare you for unforeseen medical expenses, unemployment, or home or auto repairs. Most financial planning experts suggest building up 3-6 months of savings before you start to work toward other financial goals, such as paying off debt or investing.
3. Research Student Loan Repayment Plans
Many teachers enter the profession with exorbitant amounts of student loan debt. Although other career paths may not offer much support when it comes to paying off those loans, teachers and other public servants do receive significant federal assistance.
Here is a breakdown of the student loan repayment plans available to teachers:
- Public service loan forgiveness (PSLF) program
- Forgives the remaining balance of your federal direct loans after 120 payments (approximately 10 years)
- Teacher loan forgiveness (TLF)
- Forgives up to $17,500 of your direct or FFEL subsidized or unsubsidized loans after five years at a qualifying school
- Perkins loan cancellation for teachers
- Forgives up to 100 percent of your Federal Perkins loan program if you teach full-time at a qualifying school or teach a high-demand subject
- State-sponsored student loan forgiveness programs
- Forgives loans for teachers especially in high-need schools
Find out more information about these programs and federal student aid before you jump-start your career.
4. Explore Additional Revenue Streams
You can monetize your passions and professional expertise and diversify your revenue streams during your off hours. Dive into your love of teaching outside the traditional classroom through opportunities such as tutoring, selling lesson plans, and teaching ESL. You could also strategize a passive income by blogging or creating your own courses, especially before the busyness of the school year ensures. Finally, make the most of weekends and summer vacation by spending a summer teaching abroad, nannying for a family, working as a summer camp counselor, or landing a gig as a local tour guide.
At the same time, you can take advantage of local discounts to minimize your spending in the classroom and on professional development. Stores such as OfficeMax & Office Depot, FedEx, Michaels, and Barnes & Noble offer excellent deals for teachers year round.
5. Claim Your Tax Deductions
When tax season rolls around, it is easy to get overwhelmed. But as a teacher, you could snag yourself significant savings. As part of the educator expense deduction, teachers can receive up to $250. Married teachers filing a joint return can receive a deduction of up to $250 each for a maximum of $500. Teachers can also claim general classroom expenses. Unreimbursed employee expenses are job expenses and certain miscellaneous deductions. These expenses must exceed 2 percent of your adjusted gross income.
6. Monitor Your Spending to Increase Your Savings
The best way you can budget effectively is to routinely monitor your expenses. Mobile banking and budgeting apps allow you to manage your finances and set financial goals for the long term. You can streamline the process of reporting your expenses come tax season and build up savings as you set aside money to invest.
An app can also help you understand where most of your money is going and where you can cut back. Sleek visuals and easy integrations will make managing your spending something you look forward to doing, not something you dread.
Managing your money doesn’t have to be an intimidating process. Still wondering where to get started? Learn more about online and mobile banking at FSCB or download FSCB’s mobile budgeting app, MoneyTrack, to start making your money goals of the future a reality.