Hello Fellow Educators!

Please complete the following 3 tasks to secure your financial future:

ACTION #1: Automate your savings.

If you do not have a savings account, open one today and begin to fund it each week on pay day. Begin with $20 per week and then double it each week until you reach an amount that you are comfortable with. I started saving $20 per week and now I save $1000 per week using this method. It took me several years to reach this level of saving and I worked a part-time job, but it was worth it. As the saying goes, ‘cash is king’ and we need to have cash on hand to help with unexpected expenses that may arise as well as save for specific goals that we may have like a family vacation during the summer break. After I became comfortable with saving, I opened several savings accounts that each had a purpose. For example, I have my emergency fund account, my summer vacation fund, and my real estate account.

ACTION #2: Eliminate debt.

Make a list of all the credit cards you have, the balances you owe, and the interest rates they are charging you. If you have access to 0% offers transfer the balances and then create a plan to pay it off in the time allotted. If you do not have that option, then consider a personal loan to consolidate debts at a reduced interest rate. Once you have eliminated the debt, redirect the money you were paying to debt to your savings account.

ACTION 3: Fund a 403(b) or 457 plan.

As educators, we have access to either a 403(b) or 457 plan depending on what our school district offers. These investment vehicles are like a 401(k) in the private sector. Contact your human resources department and open one of these accounts. Fund it pre-tax each time you receive a paycheck. Start with $50 per week and then double it each time you receive a raise. The maximum that the federal government allows you to contribute is $20,500 in 2022. However, if you are 50 years old or older you can contribute an extra $6500 per year. Do not forget to invest your contributions in low-cost index funds. Then sit back and watch your nest egg grow while you teach your students.

If you need help with any of these actions, please contact us at Teacher talks Money and we will be happy to help you get started!