It’s almost back to school time in many parts of America. Teachers have faced a difficult and challenging past few years. Whether you are a new teacher entering the field, or you have been in the field for a long time, this is the perfect time to assess your financial situation. Here are some savvy financial tips to consider.
Tip 1 – Decide to be Financially Independent
Making the decision to be financially independent is probably the most challenging aspect of wealth building. Your goal of financial independence is first to decide to be financially independent. It’s harder than it sounds. To stop living paycheck-to-paycheck, reduce debt, right size your lifestyle, and finally start amassing wealth for your future really is harder than it sounds. Just making this mental adjustment, and meaning it, is actually the main hurdle to doing better financially. It needs to be your new mantra! Speak it aloud, write it down, post it to the fridge, your laptop, in your car, in your electronic day timer or wherever and however you need to be reminded. Say it, believe it, become independent!
Tip 2 – Know Your Cash Flow
Teachers get paid on a variety of schedules. Regardless, back to school is a good time to review your budget, goals, and how much you are investing, saving, and spending. A new school year is a great the time of year to sit down and make sure you are paying yourself first, saving enough for retirement, and not allowing “lifestyle creep” to take a bigger bite out of your income. Lifestyle creep is when spending slowly increases over time without you being aware. Right now, with inflation spiking, lifestyle creep is a very real danger. You must know your cash flow. Do a serious assessment of what you owe, what you own, and what cash flow you have every month. Find statements for your credit cards, mortgage, consumer charge accounts, any money owed and learn the balance, the interest rate, the minimum payment and create your own personal balance sheet. Do not guesstimate; know thy self. Use Word or Excel if you have to but learn where you are financially. Be sure to list income, savings balances, and equity in your home if you’re a homeowner. By building your own personal balance sheet, you’re getting to know your financial self. You can also start for free using my planning software.
Tip 3 – Check on Retirement Plans at Work
It may sound crazy, especially for new, young teachers just entering the field, but now is the perfect time to learn what retirement plan options are available to you from your employer. The workplace plan is generally the wealth building workhorse for most of us. For some teachers, their employer may be a unified school district, for others it may be a private corporation. Either way, be aware of what retirement plan options are available to you. You most likely have one or more of the following options: a traditional pension plan, 401(k), 403(b), or other plan type. All teachers should know their plan type and know how much they are contributing and importantly, any match or profit-sharing contribution. Teachers also need to know how their money is invested. Are you diversified enough? What’s your personal level of risk?
Tip 4 – Stop Using Your Own Money
We sorely underpay teachers and undervalue education in this country. Because of this, most public schools and teachers are underfunded. Teachers who are just barely getting by frequently use their own funds to cover classroom expenses. This is appalling. If you are teacher doing this, please stop! Ask for donations from local companies, parents, friends, relatives, organizations such as Rotary, your city and county… anyone you can think of. But please stop contributing your own money toward the funding shortfall. Check out movements like #ClearTheList and #HelpATeacher on Twitter to see if you can secure classroom supplies. Another good source is SupplyATeacher.org for free supplies. Make Google your friend and seek out organizations and ask for help. Be bold, be brave, and ask for what you need.
Tip 5 – Learn from a Pro
As a teacher, you are a professional in your field. However, personal finance may not be your thing. If it’s not, hire a pro. Seek out a financial planner to help you and consider a fee-only planner that works hourly. Make sure you like the person and keep in mind that it is a good idea to have an annual financial checkup just like you have an annual doctor’s visit, or dental checkup. An hourly, fee-only planner can work with you over time to help keep your goals front and center and help keep you on target for reaching those goals, and for reaching retirement.
As an independent CERTIFIED FINANCIAL PLANNER™, I can help you make financial decisions for your new school year. Contact me and let’s get started. #talktometuesday #getstarted #HowIcanHelpYou #GetHelp #Hireaplanner #summervacation #vacation #CFPPro #savemoney #retirement #backtoschool