Author Topic: Budgeting as a teacher  (Read 1241 times)

dmac680chi

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Budgeting as a teacher
« on: April 09, 2018, 09:39:50 AM »
This article explains the budget for a FI minded teacher. As someone looking for teaching jobs and substitute teaching, this is something to keep in mind. Although I think teachers should get paid for overtime and compensated more, this is a good example to how to live frugally or affordable as a teacher. I would truly be curious taking a peak into teachers budgets.

https://monkeyfreeme.com/2018/04/08/what-a-teacher-budget-looks-like/


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clarkfan1979

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Re: Budgeting as a teacher
« Reply #1 on: April 15, 2018, 04:48:34 PM »
I think Texas ranks fairly high on teacher salary relative to cost of living.

My first job out of grad school was a full-time college instructor at a State University in Florida. With a Ph.D. my starting salary was 40K. After 4 years of experience by salary was increased to 42.6K. This was 2011 to 2015.

Freedomin5

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Re: Budgeting as a teacher
« Reply #2 on: April 15, 2018, 10:24:13 PM »
International school teachers have a different budget. Here's a sample monthly budget from China for a family of three, with only one person working:

$5000   Net salary - school takes care of the taxes and gives us the post-tax remainder. Salaries typically range from $4000 to $6000 per month, depending on the school

$0        Housing - free; provided by the school; typically a recently-built 2 or 3 bedroom furnished apartment close to school
$20      Water
$10      Gas
$40      Electricity - this is if you're really spendy; it can be lower if you don't use your heat/AC as much

$0        Lunch - provided on weekdays by the school
$600    Other groceries - purchasing imported/certified safe food from the fancy schmancy store, eating out at restaurants
$100    Transportation - mainly taxi, bus, subway - the school's housing is actually biking distance from school. This is for weekend travel.
$0        Education - teachers' kids can attend the fancy private international school for free
$100    Miscellaneous - clothing, gadgets, gifts
$83      Annual flight back to home country, spread out over 12 months - the teacher gets their flight reimbursed, this is for SO and kiddo's flights

$953    Total Monthly Expenses

$4047  Monthly savings/investment money

For international teachers, because your biggest expense (housing) is taken care of, and because you typically don't drive here and public transportation is cheap, cost of living really goes down and savings really go up. BTW, there is a huge need for foreign (read, Western) licensed teachers here, which is why salaries are quite competitive. Salaries also factor in a "hardship" allowance, since it is not easy living in a developing country.

Reddleman

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Re: Budgeting as a teacher
« Reply #3 on: June 01, 2018, 09:27:50 AM »
I'm a teacher in NY, and my budget looks pretty similar.  More on heating costs, less on insurance because we don't have any dependents, but in the ballpark.  Budgets for teachers and most other people are similar.

I think looking at retirement as a teacher is pretty dependent on where you live.  In NY teachers (outside of the city) make a decent middle-class wage for professional college-educated workers.  Of course, we all need to have Master's degrees as well, so lower than you would expect for the average similarly credentialed person living in a similar community.  But we also have higher taxes than most other states, so it averages out.  I won't get into the "are teachers paid fairly" debate, because that all depends on a whole bunch of factors.  Here's a good comparison of salary vs. cost of living by state:

https://www.edsurge.com/news/2017-06-01-graph-where-do-us-teacher-salaries-really-go-the-furthest

It doesn't factor in things like how good the retirement system is (and if it's funded), variations within a state, other benefits, etc.  But it's pretty good. 

Now on how to work the path towards FIRE as a teacher:
1. Have a spouse that has a job that pays at least as well as you (hopefully better)!  Not really kidding on this one. Mustachian living and two incomes are the reason why we are above a 50% savings rate.  Without this, it would be much harder.
2. Make sure you understand how the retirement system works in your state/district.
3. Don't get sucked in by crappy 403b providers- and contribute as much as you can.
4. Remember it's the long haul.  Most retirement programs get better after a certain amount of time (usually around 20 years), so if you're not sure you can make it that long teaching may not be so great if you're concerned about retiring early. NY retirement system is great BTW- fully funded, separate from the NYS gov't, and very well managed. Most systems are nowhere near as good.
5. You have to like learning, kids, and have a pretty thick skin.  Teachers are both one of the most respected and trusted professionals, but also constant targets.  It really helps if you love it.


startingsmall

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Re: Budgeting as a teacher
« Reply #4 on: June 03, 2018, 02:23:56 PM »
This article explains the budget for a FI minded teacher. As someone looking for teaching jobs and substitute teaching, this is something to keep in mind. Although I think teachers should get paid for overtime and compensated more, this is a good example to how to live frugally or affordable as a teacher. I would truly be curious taking a peak into teachers budgets.

https://monkeyfreeme.com/2018/04/08/what-a-teacher-budget-looks-like/


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His budget is $42k/year? That means a pre-tax income of ~$50-55k/year, probably, which isn't even attainable without a master's degree in my state. (Even someone with a doctorate doesn't hit $50k until they've been teaching for 10 years, according to the salary schedules posted online.) I know NC sucks in terms of teacher salaries, but still...

AZDude

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Re: Budgeting as a teacher
« Reply #5 on: June 20, 2018, 12:51:51 PM »
Which brings up a good point. As a new teacher, choosing your location to build your career is important. Choose wrong(NC, AZ, Kansas) and you could be missing $15K a year in savings potentially.

The Dallas/FW area has teachers making almost $20K more per year than Phoenix, with a relatively similar COL.

Say you spend $24K a year to live on. Starting in Phoenix, you make $36K per year, with a take home that is roughly $24K, with about 23%(11.5% plus matching from the state) of your salary going into a pension system(that can be withdrawn early into an IRA, or ROTH-IRA, for early retirees). To reach FI, you need $600,000. You can put away about $8K per year, and are pretty much looking at 25 years until retirement, since pay raises are few and far between.

In TX, you are looking at 15 years before FI. You save 10 years just by relocating.