Broker Check

Life hack your personal finances as a first-year teacher

| July 20, 2018
Share |
I think about all the times in my life when I thought I knew more than those who'd come before me -- be it my parents, coaches and managers. As I have matured, I’ve come to appreciate the wisdom I’ve gained from others -- especially those who have been “there” before me. As an adult, I too have found myself sharing what I've learned with others. As a teacher, I tried to share as many life lessons as I could with my students. As a financial advisor, I continue to do so in an effort to educate my clients. No one expects you to do life ALL on your own -- we are best in teams and when we learn from one another.


If I knew then what I know now...

Before I graduated college, a good friend of mine introduced me to my first financial mentor -- a finance professor at ND. As a future educator, it was a no brainer for me -- I was intent on learning how to manage my money. Among many lessons, one he shared early on was to try living like a college student for my first few years out of college -- regardless of the job I have. This is a hard concept for most recent college graduates to grasp, myself included. Why?
  1. This was the first time I was going to be making a real salary and it was a lot of money for me considering what my parents earned.
  2. We work hard and deserve to "treat yo' self!"
  3. You might feel internal pressure or pressure from your family to be “better off” than they were.

The expert in anything was once a beginner.

Ten years ago, someone took the time to teach me some basic personal finance concepts that have made a difference in the way I view my money and how I set goals. It started with me as a first year teacher. I didn’t know what I was doing in my job, much less my finances! I committed to learning a little bit at a time and I had someone hold me accountable to the goals I set. We teach our children and students that by building strong habits early, they are likely to become a part of how we operate. The same can be said for bad habits, too! If you’re a veteran teacher or a non-educator looking for a reset when it comes to your personal finances, there is something here for you as well.


Personal Finance Hacks for 1st and 2nd year teachers

Although these hacks are geared toward young educators, they can be applied to other disciplines and to different times in your career. Committing to just a couple could make a big difference for you in the long-run.
  1. Mindset. Mindset. Mindset. Enough emphasis? Seriously though. Start developing a healthy mindset about money if you haven’t already. For me, I read a few books right out of college that shook my beliefs about money. Sometimes, we need to unlearn what we learned growing up -- maybe even what we saw our parents doing. However you decide, do it. Education will transform your life and likely your finances. If you’re not up to reading about personal finance, use Audible, listen to podcasts, or invite me to coffee! The idea is to simply learn to think differently about money.
    Instead of saving what you don’t spend, spend what you don’t save.

  2. Understand what your take-home pay is/will be.This is a reality check and sometimes a let down for young earners. You don't get to keep 100% of your paycheck so it is best to plan accordingly. See example -- if you're an educator in TRS, don't assume you contribute to social security. In the image, I removed the social security contribution but added the TRS contribution under 'State Income.' Don’t forget to account for things like your alternative certification program (ACP), if that applies to you. Those can be added in the pre or post-tax sections. You can visit SmartAsset to calculate your own.


  3. Set your expectations and be realistic. I believe you can have anything you want, you just can't have it all at once and you need to plan for it. Spend on what you love and cut back ruthlessly on what you don't. Your fixed monthly expenses shouldn't exceed 50-60% of your take-home pay. Yes, that even includes your student debt payback. If you're not there today, aim to get there.

  4. Pay yourself first. Today, most Americans have less than $1,000 saved for retirement and 50% have nothing saved (Economic Policy Institute, 2016). Rather than saving what you don't spend, spend what you don't save. This was a huge mindset shift for me and vastly different from what I knew about how people save. Get in the habit of saving money now, before you get accustomed to your take-home pay. Aim to save between 10-15%. You will likely find that you will figure out how to make it to the end of the month with what you have left. Make some adjustments as needed. The important thing is to start.

  5. Find a roommate. This is one of the smartest things I did as a young teacher. I get it, you're grown and are ready to live on your own. That said, being a teacher is hard work. Having someone to vent and celebrate with was just good for my mental health. Being able to split ALL expenses was also a plus. Even if you just do it for a couple of years, your future self will thank you.

  6. Use your current car or buy used.This is likely one of the more difficult financial decisions for people. And I don’t blame them, I love cars. I’m also not here to judge you on what to value. We often dream about what car we’ll get when we start earning our first paycheck. BUT, many recent college graduates go out and lock a good portion of their paycheck into a car payment for 5 years, if not longer. If you already have reliable transportation, use those funds to start a rainy day fund for when you need new tires or a tune-up -- because you will (see my blog on emergency funds). Don’t get me wrong, I want a Tesla. I just don’t need one today.

  7. Shop around to lower your monthly bills. You can shave a significant portion off your monthly expenses if you're willing to do some research. Look into your car & renter's insurance, cell phone, electricity, cable bills, etc... I save money in these areas by streaming rather than having cable, by utilizing a less expensive cell phone provider, for example.

  8. Take advantage of teacher loan forgiveness. I know this does not apply to all loan types but you may qualify if you teach in a Title I school. I was able to get a portion of my loans forgiven over the course of 4 years teaching in a Title I school. It takes some work on your part, but it is doable. If you're Teach for America, you may be eligible for an AmeriCorps award that can be applied to your federal or state loans. If you think you might apply for forgiveness, read the rules before you decide to consolidate any of your loans.

  9. Find your side-hustle. If you’re a 10 month-employee, you have a unique opportunity to earn a little extra during the summer. Summer school is the obvious one. But maybe you just need a break from the classroom -- if so, get creative. Uber, Etsy, etc..

  10. Teacher discounts! Classroom materials aside, teachers can get discounts on technology, clothing, furniture, travel, etc...Take some time to substitute your discount for items that you traditionally pay full price for. Be sure to keep your Teacher ID handy, 

It is important to note that you will not be a new teacher forever. Not only will you get better at your job, but your income will increase over time, especially if you wish to develop as a leader. As those things happen, you will have developed a healthy mindset around money as well as good habits. Even if you veer off course now and again (because life happens), you will have the foundation and tools to get back on track.


Let’s Make a Plan!

I know that you're busy and it's not always easy to make sense of your personal finances. There is no substitute for having a plan. Whether you’re just starting out or interested in learning more, I am happy to be a resource along the way.

Schedule a Meeting: In person or virtual


Jesse is a graduate of the University of Notre Dame and earned his Master’s in Education from Harvard. In his education career, he served as a teacher, counselor and Director of Alumni for YES Prep Public Schools. He is a member of the Teacher Retirement System of Texas (TRS) and takes pride in helping fellow educators better understand their pension and plan for their future. Learn more about Jesse.


Jesse’s Recent Blog Posts

  • If you could predict the future, would you plan differently?
  • 529 Day: My college savings story.
  • Am I saving enough for retirement?
  • Your cell phone bill is standing between you and your goals
Share |