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Teaching is a noble profession. Besides my mom, I have several relatives working education, ready and willing to help their student succeed.
As necessary and crucial as they are, sometimes teacher salaries are limited. It took some sacrifices but my mom was able to raise three kids with her income.
Living on a Teacher's Salary
If you are a teacher, you're familiar with many of the financial challenges that can pop up. With some planning and a system, it's possible to not survive but thrive.
Creating a Doable Budget
Let's see how we can use an average teacher's salary to create a doable budget.
I'm using the local county's pay scale for a teacher with a Bachelor's Degree, certification, and 5 years of experience. That gives us an annual salary of $41,404.20.
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: Twice a Month
- Federal Filing Status: Married, Filing Jointly
- # of Federal Allowances: 1
Here's how the calculator broke down the gross and net pay:
- Semi-monthly Gross Pay: $1,725.18
- Federal Withholding: $150.86
- Social Security: $72.46
- Medicare: $25.02
- North Carolina: $108.00
Monthly Net Income: $2,737.68
My goal was trying to get a zero-based budget. I'm also trying to keep the imaginary couple expenses within the teacher's budget as I believe that learning to live on one income can be a big advantage.
The second income can be used to knock out your debt, boost your savings, and contribute more towards retirement.
My basic tool of choice to get a budget framework? Dave Ramsey's Gazelle Lite calculator. You can easily tweak it to fit your needs.
- Housing: $820
- Utilities: $250
- Savings: $100 (General Savings)
- Retirement: $200
- Food: $300
- Transportation: $300(Car payments, gasoline, insurance, etc)
- Giving: $180
- Medical/Health Premiums: $100
- Personal: $150
- Recreation: $100 (Eating Out/Movies)
- Debt Reduction: $200
Total Monthly Expenses: $2,700
As you can see, it's an extremely tight budget, but the upside is if your spouse works you two can make some head way on paying down debt and savings.
To get there though, you have to be systematic with your approach.
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?