Smart Ways to Save on a Teacher's Salary
14 Feb - Posted at 03:46h in Financial Planning
Saving money can be hard. When incoming money is barely more than outgoing expenses, how do you save for your future? At Appreciation Financial, we understand how hard it can be to build your savings up. Our representatives are familiar with the ups and downs of living on a teacher's salary. So, take it from us when we tell you that these money saving tips for teachers are effective. Here is how you can start saving money today.
Budget For Your Future
If you have not created one recently, it is a good idea to come up with a financial breakdown for yourself. Itemize your expenses and your sources of income. Find areas where you can “trim the fat.” This just means finding areas in your budget where you can afford to cut back and put the extra funds into a savings account.
This is what we call “creating space” between income and expenses. The more room you have, the more you can afford to save. Contributing as much as you can to your savings account now, will pay off exponentially in the future.
What are you saving money for?
How do you choose the right investment to help you save for the future? That depends on several factors. Ask yourself what your financial goals are five or ten years from now. Do you want to upgrade your living situation? Maybe you are looking to buy a more reliable vehicle. How much money do you need to accomplish your goal? If you are saving for retirement, the answer to that question might shock you.
If your savings goal includes a large expense relatively soon, then it is going to change which investment option is best to accomplish that goal. So, let's talk about a few different examples of financial goals, as well as money saving tips for each goal.
1. Saving for a moderate expense relatively soon
If your money savings goal is short-term (less than three years away), the best option is to put money in a savings, money market, or cash management account. So instead of focusing on how to invest your money for this situation, here are a few tips to save more money on your teacher's salary:
- Eat out less. Bring a large stockpile of non-perishable food items like canned fruit or fish, crackers, and peanut butter to the office. Then, if you forget to pack a lunch, you can take from the stockpile instead of going out to eat. This gets even easier if your workplace has a community refrigerator. Buy in bulk and make a plan to eat what you have stashed at work. You will save time getting ready in the morning, and money, by not going out for lunch.
- Cancel subscriptions. Maybe you subscribe to several streaming services currently. Think about which one you really want and cancel the rest. Along those lines, maybe you do not need 400+ channels with your cable TV subscription. Talk to a representative at your cable provider about downgrading, or even cancelling your subscription (provided there are not any fees associated with cancelling).
2. Saving for a large expense several years from now
If you are saving money for something several years from now, we encourage you to consider investing in stocks. Longer-term money savings goals may allow you to absorb market volatility. Be sure to speak with a securities-licensed representative to guide you along this path.
3. Saving for a large expense in the distant future
Are saving money for a very large expense a decade or two from now? Saving for your child’s college fund? A 529 college fund is a great way to invest. It offers tax-deferred earnings, and distributions for qualifying educational expenses that are exempt from federal taxes.
Are you saving for retirement? If your employer offers one, invest in a 403(b) retirement plan. It can help shore up the gap between your pension and your retirement savings goal. If you need to save even more for retirement, you can invest in either a Traditional IRA or a Roth IRA. Individual retirement accounts (IRAs) are investments that offer tax-free or tax-deferred growth and allow individuals to make pre-tax contributions. IRAs are low-risk, moderate-return investments that are specifically designed to be more beneficial the longer they are left alone.
Speak with One of Our Representatives Today!
Smart investments are key when it comes to saving money on a teacher's salary. At Appreciation Financial, we thrive on helping our hard working teachers and public servants conquer their financial obstacles. For more money saving tips for teachers, speak with one of our financial agents about setting up your investment portfolio.