Personal Finance

Full-Year Budgeting for Teachers

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Last updated on July 23, 2019 Comments: 13

The school year within the United States public education system lasts about ten months, so some teachers face an interesting budgeting issue that most American workers do not.

The first issue is handling a below-average paycheck. Compensation for public school teachers varies wildly depending on years of experience and location, but for the most part throughout the country, starting teachers receive below-average compensation for their level of education. The pay may be accompanied by decent benefits and a pension, but it’s safe to say most people don’t go into primary or secondary education for the money.

Without getting into the reasons that compensation for public school teachers is low, a low salary requires thoughtful conservation of money. While many teachers are often part of a household that has two incomes, that isn’t always the case. The usual tips apply:

  • Design a budget that works. A budget, particularly for a household whose expenses approach or exceed income, is essential for coming out ahead at the end of every month.
  • Track your spending. Once you start paying attention to how much you’re spending on gourmet coffee or other unnecessary expenses, you will have a stronger ability to see room for financial improvement.
  • Get out of debt. Student loans are often the first debt teachers must tackle. The typical path to becoming a teacher requires four years of college education. That is the minimum; higher salaries are often available to teachers who have a master’s degree. While there are often alternative paths to receiving a certification, most teachers have at least a bachelor’s degree in education. While there are ways to keep the cost of this education low, that might not have been considered while going to college. Thus, teachers often start out in a low paying industry with thousands of dollars of student loan debt. Start a plan for eliminating that debt as soon as possible.

Teachers work (officially) about ten months a year, and school districts have different methods of paying their teachers. These are the two main approaches.

  1. Teachers receive paychecks every week, every other week, or twice a month, even over the summer. This way the full salary is paid evenly over the entire year.
  2. Teachers receive their full pay spread across the ten months they work, receiving nothing over the summer.

With the second approach, a teacher would need to take care not to spend all income throughout the ten months he is working if he intends to spend any money throughout the summer. Mathematically, the best approach would be to save one-sixth of each paycheck in a high-yield savings account, smoothing out income to include the summer months. When the summer arrives, the teacher can create his own paycheck by withdrawing from the savings account.

Many teachers continue working over the summer, whether acquiring additional certifications or preparing lessons for the new school year. Some have secondary jobs outside of teaching in order to earn an additional income, as well.

Teachers who stay in the same school district for over a decade can often turn below-average incomes to above-average incomes, and those who choose to go into administration can earn even more money, but teachers who have only a few years of experience or less can struggle financially. A teacher could improve her finances by being aware of their income and expenses and by budgeting for the full year.

Article comments

Anonymous says:

My wife is a substitute teacher. From what i’ve seen any and all substitutes are only paid on a 10 month period. You get paid months you work and don’t get paid over the summer. Luckily she also teaches music lessons year round and only substitutes to supplement our other income. Great article. For actual teachers this may be worth repeating at the start of the school year as summer is just now starting and it is a little too late for this school year to implement.

Anonymous says:

Teaching as a seasonal job – that’s a very interesting way to look at it. I think the assessment that “most people don’t go into primary or secondary education for the money.” isn’t quite accurate; most people may not go into the field for the paychecks, but rather for the cushy pension they know will be theirs after just 20 years or so in the field. A compensation package is just that: a package. Part of their package includes 10-month pay plans on top of fantastic medical benefits and lucrative retirement pensions. You’re right, though – they do need to budget wisely so those 10 months of income will stretch into 12 months of paid bills.

I have a friend who’s in her mid-40s and can hardly wait for the next two years to pass so she can retire and take her piece of the Texas Public Employees Retirement System pie and start chapter two of her life. Sigh….

Luke Landes says:

That’s a common feeling for anyone approaching retirement, especially if they know a good retirement package is on the way. In other jobs, when job performance suffers due to people thinking more about the pot of gold at the end of the rainbow than their jobs, there are other ways for companies to make up for deficiencies. When teachers aren’t focused on their jobs, their students suffer, and there’s little the schools can do.

I am sure that there are many teachers who are more interested in their pension than the success of their students, but in my experience (and I have a lot of experience in the education field), especially among younger teachers (who perhaps haven’t yet had the time to become cynical), a significant majority chose to become teachers because they’re passionate about education. Whether that passion stays with them is the question — and maintaining passion among young teachers is one of the many failing aspects of the public school system.

Anonymous says:

I agree with your assessment of young energized teachers. The union system that gives teachers tenure and ensures they keep their jobs while young energetic teachers who cost the system half as much get let go in any budget crunch is one of the most glaring problems addressing the issues of both passion and budget.

Schools can’t keep the best or the cheapest. They have to by rule keep the oldest and the most expensive. So we have to watch our class sizes increase towards the 30 kids per class mark because we can’t keep cheaper teachers who are fired up. We have to keep expensive teachers some of whom may not be that dedicated anymore.

I am a product of public education and my kids are both in it. I don’t want to kill it. I just want it to stop behaving like a spoiled brat 8 year old. As long as unions have their say, that will not happen.

Anonymous says:

Some of this info works well for the self-employed as well. Income from that can vary greatly, and can be seasonal like teaching.

Anonymous says:

I am sorry but the opening premise is just typical whining about teacher pay.

The first statement that teachers are handling a below average paycheck is just not true. The second statement that they receive below-average compensation for their level of education is a non sequitur.

Lets start with the non sequitur. This is the same kind of non sense that the teacher in NJ was complaining to Governor Christie about not being properly compensated for her certifications and her master’s degree and her experience. When a population is given constant scheduled adjustments and guaranteed benefits and tenure all based on a formula that includes things like certifications, education, and time on the job you develop these kinds of entitlement expectations. This does not exist anywhere in the real world other than in a government protected bureaucracy or in a union protected bureaucracy.

People go to school to get their advanced degrees all the time. Some of them make a lot more money after getting them, some don’t make a penny more. Ask the recent crop of college graduations if their education is being properly compensated for in the current labor market. There is no direct rule that says a certain level of education entitles one to a certain level of compensation. So the fact that a teacher with a master’s degree makes less than an engineer with a master’s degree is irrelevant. The two have nothing in common other than the same amount of years in school. You might as well say teachers get below average compensation for their sleeping skills. People who sleep the same as them on average make more. And the two have nothing to do with each other. Neither does education and pay. What matters is area of education, not years.

Now as to teachers getting a below average paycheck. First of all, on an hourly basis, it is not below average. Teachers are getting far more vacation even from day one than a typical employee. Yes they might get a slightly lower than median sized check overall but if I take a temp job on purpose that works 6 months out of the year am I allow with a straight face to say I make less than average pay when the reason is because I work fewer hours? Second of all, they make less than average compared to whom? The whole population? Well so do janitors and gardners and so do social workers too who might even have more schooling than a teacher. No one ever bitches about janitor and gardner pay though and only social workers bitch about social worker pay. In fact in comparison to private school teachers, most public school teachers get paid more with the exception of some of the very highest private academies. So when comparing to their peers public school teachers are not under paid.

This is just pure propaganda. Unfortunately it is repeated so often that many people believe it and many teachers do as well. I am sorry that teachers are not valued monetarily more than they are, but facts are facts and the only reason public teachers make as much as they do is the govt forces tax payers to pay for them. When the private sector allows parents to choose what to pay, the private teachers make less on average and thus the govt is paying more than parents have decided teachers are generally worth. If the parents by virtue of the private schools they choose to send their kids to think the average teacher is worth less than what the public schools pay a teacher then by what objective standard are we to use when determining that public school teachers are receiving low pay?

For the job they do, the evidence says most are overpaid. And as far as total compensation goes, its better than a whole lot of jobs out there. And frankly for most teaching jobs, its a rather simple thing to do and simple things tend to get paid less. Now don’t confuse simple with easy. Having to manage 25 noisy 8 year olds all day? I would go insane. So I don’t say its easy, but it is pretty simple. Unfortunately not easy doesn’t usually translate to high pay. Complicated requiring lots of intense training and skill is what usually translates into high pay.

And that brings us back to education. If something is not complicated, having lots of education doesn’t make it worth more pay. The education has to allow you to do something the less educated cannot do. If not, it hasn’t provided any real economic value and that is what people are compensated for, not a piece of paper from a university that defers upon them some kind of royal status that should be compensated for.

If this note sounded hostile, I assure you, it was intentional. I realize that the point of the post was not about how teachers are underpaid but the first 3 paragraphs have multiple typical low pay teacher propaganda in them and I am really tired of the whining and lies about teacher pay.

Luke Landes says:

I didn’t say teachers deserve to be paid more. I didn’t say they were underpaid. In fact, I pointed out how, after a long time in the same district or after moving into administration, pay could be quite substantial. Just as you said, Apex, “Yes they might get a slightly lower than median sized check overall.” That’s what this post is talking about. The benefits can’t be translated into money to pay for everyday expenses that would fall under a budget.

Although this article doesn’t address it, I *do* think teachers deserve to be paid well, and it would be beneficial for the future of this country to attract excellent teachers to the public school system. There are many ways to do that, and getting away from the idea that teaching is a career path for housewives, those who don’t have ambition to succeed in a “real” career, or those who don’t really need income (trust fund babies, married-into-money, etc.) would be a good way to go about it.

Anonymous says:

Well said. Compensation is based on supply, demand, and those pesky union contracts.

Full Disclosure: I begrudgingly pay union dues because I am giving no choice

Anonymous says:

*ducks for cover*

I agree with statements, but wait until the teachers and union members read your statements.

Anonymous says:

My mother was a teacher (retired now) and elected to take the 12 month payment option. She was also very good at budgeting and planning so has done fairly well considering the low salary that teachers make.

Anonymous says:

Indeed teachers seem undercompensated in the early years but like most of us they have career paths which can lead to higher income and regular paychecks. School administration seems to be where the money is. School principals and school-district superintendents as well as all the bureaucrats in between, are being well compensated; even (arguably) over-compensated. As far as the pay scheduling is concerned, I would have to use every ounce of discipline I could muster in order to plan and execute a budget with a two or three month gap in income. In today’s economy the likelihood of a part-time “fill-the-gap” job might be tough to come by. I don’t envy those facing that challenge.

PS: Please don’t let “Krantcents” critique my spelling or grammar – I haven’t in school for over 30 years.

Anonymous says:

My mother is an educator in Illinois. She was given the option to get paid for 9 months while she is working, or for a 12 month period. This way she can still get compensation for the few months she has off over the summer. I remember as a child their used to always be issues financially for a few months over the summer. The benefits were truly why she took the job, but now with the poor economy they are trying to force here into early retirement. If the other educators her age do not retire within a few years, they plan on changing the laws to strip them of a large chunk of their pension. It seems like more often the educators in this country are getting the short end of the stick!

Anonymous says:

I am a teacher in Los Angeles and we are paid over a twelve month period. Teachers are paid once a month within 5 days after the end of the month. Teachers are not well paid but it is similar to many government jobs. The benefits are good and the retirement is decent. Whether you are paid differently or the starting salary is lower, budgeting is important.