Author Topic: Budgeting as a teacher  (Read 2100 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.

aceyou

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Re: Budgeting as a teacher
« Reply #6 on: July 07, 2018, 01:47:45 PM »
Me: teacher...year 12 finished.  Michigan.  Will make 68k next fall plus 5k for coaching, plus 6k for not taking insurance.  Total 79k.  I have masters plus 30 credits. 

Wife: just left classroom for administration job at ISD.  Will make 78k with health insurance next fall.  Has Ed specialist degree and going into 12th year this fall.

Total compensation between us: 157k
Pension: we both bought five years, so I can retire in 13 and she can retire in 14 years with full pension.
Saving: about 60k per year in Roth s and traditional accounts.  About 10 k towards mortgage principal, and about 8.5 percent of our salary goes towards funding our pensions.

We spend about 55k per year.  We have two young children, so daycare costs are a gig one for us currently. 

In 13/14 years when we retire at 48, the intention is to have a paid off house, about 2 million in the stash, and our pensions kicking a monthly income to us, with social security kicking in 15 years after that.  No idea what we'd do with all that money, it's way more than we will need, but we'll probably reach fi around 42 or 43, and it would be stupid not.to just work five more years and skyrocket our net worth... assuming we still like our jobs...so far we are very happy.

My advice is to get in a good state and district, then stick it out in one system if at all possible.  The pay for teachers sucks on the front end, but it's often very good on the back end if you stay long enough to climb the pay scale and receive the pension.  My wife and I crossed over that line a couple years ago and we finally stepped back and were like woah, we make pretty good incomes.
« Last Edit: July 07, 2018, 01:55:08 PM by aceyou »

mgoteacher

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Re: Budgeting as a teacher
« Reply #7 on: July 07, 2018, 10:41:13 PM »
Teacher here.

Michigan.  BA in Computer Sci/Math; MA in Secondary Education.  1 year in east coast Independent (private) boarding school.  returned to michigan in a mid-to-high cost of living city at another independent school.

Started at MI job at $43k with 1 yr experience and masters.  After 5 years, negotiated a big pay bump of 15% (independent school - no salary schedule. you can negotiate... sometimes to your benefit, usually not.. private sector yo... if you make yourself invaluable, you'll get a raise).  So, now I'm at $57k heading into year 8 of teaching, not counting $7k of coaching (two seasons, one sport varsity head coach).  Sure, you might have to bust your ass and do a shit-ton extra to skip some compensation rungs on the ladder and have some valuable skills (math/cs, coaching), but its possible to make very good living teaching.

Harsh, but my suggestion as someone that turned down a Chapel Hill job... if you're gonna teach at the secondary level, the compensation of where you are looking needs to be a major factor... and I would never recommend taking a job in NC in the public sector.  Otherwise, it's like any other job.  Contribute as much as you can to 401k/403b, save, don't waste and you'll be fine.

I hate when teachers complain about money... the benefit of 10 weeks vacation in summer, 2 weeks in december/january, 5 days at thanksgiving, a full week in spring of vacation is very much a benefit.  It has a monetary value.  Whether it is acknowledged or not.  If you're not earning enough, then put those days off to use!!!

Right on with sticking it out at one place that makes sense.... I've considered leaving current job to public sector.  But if I have to "start over" on the salary scale, it's not worth it.  However, while it is never advertised, school districts aren't required to start incoming teachers at the bottom of the salary schedule.  If I am hired with 10 years of experience and they want to start me at year 0, I can attempt to negotiate that up and they DO have the ability to move you up higher... but you'll never get something if you don't ask for it!!!!!!

aceyou

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Re: Budgeting as a teacher
« Reply #8 on: July 08, 2018, 09:16:02 AM »
Teacher here.

Michigan.  BA in Computer Sci/Math; MA in Secondary Education.  1 year in east coast Independent (private) boarding school.  returned to michigan in a mid-to-high cost of living city at another independent school.

Started at MI job at $43k with 1 yr experience and masters.  After 5 years, negotiated a big pay bump of 15% (independent school - no salary schedule. you can negotiate... sometimes to your benefit, usually not.. private sector yo... if you make yourself invaluable, you'll get a raise).  So, now I'm at $57k heading into year 8 of teaching, not counting $7k of coaching (two seasons, one sport varsity head coach).  Sure, you might have to bust your ass and do a shit-ton extra to skip some compensation rungs on the ladder and have some valuable skills (math/cs, coaching), but its possible to make very good living teaching.

Harsh, but my suggestion as someone that turned down a Chapel Hill job... if you're gonna teach at the secondary level, the compensation of where you are looking needs to be a major factor... and I would never recommend taking a job in NC in the public sector.  Otherwise, it's like any other job.  Contribute as much as you can to 401k/403b, save, don't waste and you'll be fine.

I hate when teachers complain about money... the benefit of 10 weeks vacation in summer, 2 weeks in december/january, 5 days at thanksgiving, a full week in spring of vacation is very much a benefit.  It has a monetary value.  Whether it is acknowledged or not.  If you're not earning enough, then put those days off to use!!!

Right on with sticking it out at one place that makes sense.... I've considered leaving current job to public sector.  But if I have to "start over" on the salary scale, it's not worth it.  However, while it is never advertised, school districts aren't required to start incoming teachers at the bottom of the salary schedule.  If I am hired with 10 years of experience and they want to start me at year 0, I can attempt to negotiate that up and they DO have the ability to move you up higher... but you'll never get something if you don't ask for it!!!!!!

Well done navigating the private school payscale successfully, that's not easy.  Sounds like you are my private education counterpart...both math/michigan/coaches!  If we coach the same sport maybe we've unknowingly gone head to head over the years...I travel to your side of the state often to get better competition.  It's hard to find enough good teams on the west side of the state so we travel a lot. 

Good luck!