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Teaching is a noble profession and those who work hard to teach and advocate for their students should be respected.
I have several members of my family and friends who are educators, so I've seen some of the behind the scenes work they do. They typically put more hours in than what their contract says because they want their classroom kids to succeed.
Depending on where they live, it can also be financially challenging. Budgeting on a teacher's salary typically requires make sure every hard earned dollar is put to work.
Living on a Teacher's Salary
Let's see how we can use an average teacher's salary to create a doable budget for a couple with no kids.
I'm using our local county's pay scale for a teacher with a Bachelor's Degree, non-NBPTS certification, and 5 years of experience. That gives us an annual salary of $52,410.90.
Payscale has a list of the average teacher's salary by state if you're curious for the full list.
I'm made the following assumptions for the net paycheck calculator:
- Pay Frequency: Monthly (How NC teachers are paid)
- Federal Filing Status: Married, Filing Jointly
- # of Federal Allowances: 1
Building a Teacher's Budget
Here's how the calculator broke down the gross and net pay:
- Monthly Gross Pay: $4,367.58
- Federal Withholding: $316.86
- Social Security: $270.79
- Medicare: $63.33
- North Carolina: $168.00
Monthly Net Income: $3,548.60
Monthly Expenses for a Teacher's Budget
With this example, I'll be using the 50/20/30 budget as the framework. It's how you can divvy up your money into three buckets: essentials, financial priorities, and discretionary expenses.
First off let's look at those essential expenses like housing, food, transportation.
- Housing: $1064.58
- Utilities: $150
- Food: $327.92
- Medical/Health Premiums: $50*
- Transportation: $181.80
So a few things:
Health insurance premiums can vary greatly. With this budget, I went with the individual premium through the 80/20 plan.
Also with transportation, if this was the sole income, car loans would break the budget or severely strain it because the money for it had to come from some other place in the budget.
Since we're all about helping couples work together on their finances, we'll also include financial goals like paying off debt, savings, and investing.
- Savings: $100
- Giving: $354.86
- Debt Reduction: $200
- Retirement: $200
Note: I didn't see a match for teacher's 401(k)contributions so I instead had this budget show a Roth IRA contribution.
I've included giving as part of the budget for a couple of reasons.
First, many in our community do regularly give to their congregation/church/community. The amount may vary, but it's a meaningful expenses they include.
Second, we also some couples where they are financially assisting a family member.
That leaves with $X for discretionary spending (aka some fun money along with what you want to spend for clothes, hobbies, etc), bringing that total to $3,548.60.
As you can see, it's an extremely tight budget if it's your only income. However with two spouses, earning, it's possible to really tackle your family and financial goals.
Either way, creating a plan for your finances and automating it can be a huge relief.
5 Ways to Stay on Budget
In addition to watching your spending, there are a few thing you need to keep in mind,
- Depending on where you live, keep an eye on housing. If you live in an expensive area, buying a house within your budget may be almost impossible. If you really want to own, focus on building a big down payment by keeping your expenses low.
- Avoid credit card debt like the plague. When your income is limited, it becomes even more important to avoid high-interest debt.
- Smooth out your income and expenses as much as possible. If you are paid only during the school year, see if you can either sign up through Human Resources or a local credit union to have your pay distributed more evenly.
- Don't get sucked into a bad car loan. If you noticed the amount budgeted for transportation, you'd probably picked up that the average car loan payment ( $464) wouldn't be feasible. If possible, try to buy your cars with cash.
- Utilize the second budget wisely. As mentioned before, if your family has dual income, learning to keep the essentials under the budget of one income gives you some financial freedom. Build upon that by making sure you two are socking away enough money for retirement, paying off all your high-interest debt sooner, or build savings for a possible entrepreneurship opportunity like starting a business.
If you're looking for more guidelines to help you stay on top of finances, please check out 7 Millennial Money Mistakes.
Thoughts on Living on a Teacher's Salary
I'd love to get feedback from you. How do you keep an eye on your budget? What tips have helped you?