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First, let's address this upfront: teachers nationwide deserve a well-earned pay raise. However, until that happens, there are some strategies you can use to maximize your income and make the most of your money.
This STRONG Teacher Financial Toolkit is for educational purposes. Please do your research before making important decisions about your money. I've been fortunate to have good mentors who've offered me great advice. Here are some of the things they shared with me, along with a few things I've learned on my own. I hope some of the suggestions and resources help set you up for financial success.
STRONG Teacher Financial Tips for Teachers
- Pay off all of your debt as soon as possible.
- Once your debt is paid down, increase your savings.
- Track your expenses and set a budget. Stick to it.
- Plan your meals. Eat at home. Take a lunch to school.
- Build an emergency fund. This makes financial setbacks less devastating.
- Open a Roth IRA. Here’s why. My dad opened a Roth IRA for me as a graduation gift, and I've been putting money into it for each of my 25 years of teaching. This pays off over time.
- Open a 403(b) retirement plan. It's a plan available to educational institutions where your money can grow tax-deferred until withdrawal.
- Open a health savings account (HSA) - Here are some benefits.
- Invest in Long-Term Disability Insurance - It only costs a few dollars per paycheck, and if you are unable to work for any reason, you can still receive a percentage of your salary.
Once you’ve paid down your debt and have your emergency fund set you may also want to invest. I use the two services below and would recommend them.
Acorns - This is a fantastic idea. When I make a purchase, for example, if it costs $2.49, Acorns rounds up to $3.00 and invests 51 cents into a fund that I select. This small amount accumulates over time. If you use this link, both of us will receive a bonus of $5 to invest.
Robinhood - This is what I use to invest in stocks and ETFs. It's user-friendly. There is no account minimum, and the phone app is super easy to use. I put most of my money into ETFs but I also enjoy researching and then investing in individual stocks. Dividends seem like magic; you're earning money passively. If you use this link to sign up, we'll both get to pick out our gift stock.
The best time to start investing is yesterday. The next best time to invest is today.
As I look back on my teaching career, here are a few regrets I have connected to spending and saving.
- I wish I had been more careful not to spend money on things I didn't need.
- I wish I had saved more money earlier on in my career to take advantage of compounding.
- I wish I had spent more money on cool experiences. Good memories and adventures are some of my most treasured things.
Here are some more resources to help you learn more about solid financial moves that teachers can make.
- Book - Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School *(ad)
- Book - Retirement for Teachers: How to Come Up with a Retirement Plan That Works for You *(ad)
- Podcast - Teach and Retire Rich - Learn about pensions, the 403(b), the 457(b), and investing, fun and understandable.
- A Teacher’s Guide to Personal Finance: Expert Advice & Resources
- SEC.gov | A Guide for Teachers - Making Money Grow
- 7 Financial Tips for New Teachers | NEA Member Benefits
- The Top Retirement Strategies for Teachers
- 20 Best Money-Saving Tips for Teachers - We Are Teachers
- Saving And Investing Resources For Teachers | Investor.gov
- 3 Ways Teachers Can Get Their Retirement Savings on Track | Money
- Think Your Retirement Plan Is Bad? Talk to a Teacher - The New York Times
- 403bwise :: The K-12 403(b) is broken. Together we can fix it.
- How to Retire as a Teacher Without Social Security | Social Security | U.S. News
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