A college professor once shared this piece of financial advice for teachers with me…
“You’re going to be a teacher. That’s fantastic! I’m sure you’re going to live a really good life. But it wouldn’t hurt for you to become financially smart. Start now while you’re young.“
There isn’t much targeted financial advice for teachers available, so it’s greatly appreciated when others share what they know.
Following you’ll find key financial advice for teachers according to a group of financial advisors, CPAs, and tax professionals who work closely with educators.
While this list isn’t exhaustive, it serves as a good foundation of financial advice for teachers so that they cultivate healthy money habits and prepare well for their financial futures.
[Disclaimer]: The information within this post does not serve as formal financial advice. Consult with your personal financial advisor to receive customized, targeted advice specific to your unique money situation.
Essential Financial Advice for Teachers
1. Create Long and Short-Term Goals.
The first piece of financial advice for teachers is to record money goals, preferably at the beginning of each year.
Determine your goals, and then create actionable steps to help you arrive at your targets.
It’s much easier to manage your money when you know exactly for what you’re saving and investing.
2. Start or Increase Your Emergency Fund.
The next piece of financial advice for teachers is to create an emergency fund, also known as a rainy day fund.
Money expert Dave Ramsey talks often about the importance of emergency funds, and he has a good system to help you grow one.
How much to keep in an emergency fund varies person to person, with an average amount roughly six months of living expenses.
3. Check Your Credit Report Annually.
Check your credit report every year to make sure all of your information appears accurate.
Because of frequent fraudulent activity, making this a yearly habit is highly encouraged.
Research to find out how to obtain a free copy of your credit report from all 3 major credit reporting companies every 12 months.
4. File Your Taxes On Time.
Be prepared when tax time arrives, and file on time so that you avoid penalties and interest.
This is arguably one of the most important pieces of financial advice for teachers.
If you don’t have a complicated tax situation, consider doing your own taxes.
To stay organized, file paperwork in a portable file box so that the tax filing process is streamlined once it’s time to file.
Also, if you have business income, pay estimated taxes quarterly to the IRS.
Because you don’t have an employer deducting taxes for social security and Medicare from your side business income, you’ll have to do so yourself.
5. Keep Business Receipts Organized.
If you have a side hustle such as a Teachers Pay Teachers store or freelance, keep track of receipts, transactions, and business expenses.
Maintain separate business and personal accounts.
Use accounting software to keep track of business transactions, or do it the old-fashioned way – by hand.
6. Save Well for Retirement.
Even if you pay into a teacher pension, consider saving additional funds for retirement.
Research Roth and Traditional IRAs.
Additionally, if you pay into social security, review your social security statement annually to make sure everything looks okay.
7. Be Tax Knowledgeable.
Even if you don’t file your own taxes, know tax basics.
Educate yourself so that you have a general idea of your tax situation because tax professionals do sometimes make errors, but the consequences will be on you.
8. Buy Life Insurance.
One piece of financial advice for teachers that is often neglected is the topic of life insurance.
If others depend on your salary, consider life insurance. This way, your dependents will be able to sustain themselves financially in the absence of your salary.
9. Invest in Financial Education.
Purchase a few books to learn the basics of financial literacy.
Additionally, search online. Quality resources, such as personal finance blogs, abound.
10. Shop Around for Car Insurance.
Without explanation, some car insurance companies, even if you have no accidents or traffic violations, increase your rate significantly each year.
Shop around for car insurance every year or two, and look for the best rate that still provides value.
11. Tackle Estate Planning.
If you’ve got plenty of valuable assets, speak with a financial advisor about estate planning.
Prevent relatives debating ownership of your assets upon your departure to the other side.
If you found this financial advice for teachers helpful, you might like to read how to live comfortably on a teacher’s salary.