Money Management for Teachers: One Educator’s Story

Hey there teachers,

My name is Thom Jackson. I’m a 34-year-old teacher from Denver and have been in the classroom for four years now. I currently teach sixth and seventh-grade history.

I’m not going to get too into detail on specific numbers, but here’s the basic rundown on why I wrote this post: I constantly hear my coworkers complain about money. Sometimes it’s pay, often it’s student loans or other debts on their mind. Full disclosure, I came out of school with less than $10,000 in student loan debt — I’m fortunate to have earned a scholarship and had a bit of support from my folks. Still, once I got into the workforce, I paid this debt off in a year and a half, and have since taken the money I spent on repaying the loans each month and diverted it to savings.

I’ve spent a lot of time reading financial blogs — from retail trends to early retirement to money management to investment — and the one consistent theme I’ve found in each of them is based around one word: frugality. If you are in a position to be frugal and keep your overhead costs to a minimum, this is the number one thing you can do to begin getting ahead financially. This is my story on what I’ve done and what works for me.

My wife and I cut down to one car

Over the past two years, I’ve become quite the fan of Mr. Money Mustache. He preaches much common sense when it comes to money management. The more of his stuff I read, the more I’m baffled when I look back at certain parts of my life. Why was I so loose with money? Especially during the times of my life when I was the most broke?

One of MMM’s biggest and most frequent points of concern is the automobile. Particularly, the fascination of western culture with driving big, shiny, expensive hunks of metal around everywhere when it’s much cheaper and better to ride a bike, drive a used car, or take public transit. His basic rule of thumb is that one should never spend more than $10,000 on a car, and never buy one new. One car per household, used sparingly, is ok. My wife and I made the decision to go down to one car about a year ago after two years of continued headaches caused by car maintenance. Back in 2011, I bought a $20,000 Subaru and it gave me nothing but problems pretty much the whole time. I racked up a fair amount of credit card debt just keeping it on the road. Why?

When the opportunity came to get the Blue Book value for the car, I took it (at least Subaru’s are decent at holding value). One of the best decisions I’ve ever made. I used some the money to pay off the credit card debt and put the rest in savings. We shared her car for a while, then when it crapped out, we went in together on a used Toyota Tacoma that promises to drive at least another 100,000 miles. We spent over $10,000 on it and had to take out a loan, which sucks, but are justifying the decision because we’re splitting the truck and loan payment between the two of us, coming in right around $10,000 per person.

Granted, this is only going to work if you live within a bike commute of your school. But to get real for minute — if you don’t, it might be time to consider moving — especially if you’re a renter. There’s simply no reason to rack up the miles on your car, the spend on gas, and the windshield time cutting into your day.

I cut out extras when going out, and basically just stay home more often

Fortunately, this is something I’ve always been pretty good at, for the most part. I’ve never been a soda drinker. I never order desert. Ever. I’m not much for gas station snacks or other impulse buys at the grocery store that are meant to weasel that extra dollar or two.

I absolutely credit my career as a teacher for this frugality.

I keep this practice intact today. Part of it is a result of being married and in my thirties. We buy most of our food at the grocery store. We love cooking at home. When we do go out to dinner in Denver, we try to go somewhere where we can use a coupon or other type of discount.

Being married means we’re not out at bars or other nightlife environments designed to suck as much money from you as possible, nearly as frequently as when we were single and in our twenties. Getting married was – and this is meant with all due humor –  the final nail in that coffin.

We rethought how we travel

My wife and I like to hit the road in the summer and on school breaks. For many, travel is associated with spending excessive amounts of money. This theory is disproved by the concept of travel hacking. Even when traveling to somewhat expensive destinations, all it really takes is some out-of-the box thinking. I’ll give this example our upcoming trip to Playa Del Carmen, Mexico, for my brother-in-law’s wedding.

The wedding is taking place at an all-inclusive resort. A night at this place costs about $110 per person. Per night! The itinerary recommended by those involved in the wedding planning includes five nights at the resort. That would run us about $1100, not including airfare or ground transportation. For less than a week of travel. To stay in a cookie cutter room, eat Sysco-quality food, and experience absolutely zero local culture.

That, my friends, is nothing short of insane.

We quickly called a family meeting. This course of action was unacceptable, and revisions were in order. We brainstormed, and came up with a plan. We spent about seven minutes perusing Airbnb and settled on a one bedroom house, a mere ten-minute bike ride up the beach from the resort. The bikes, as a bonus, are included in the house rental. The house costs $80 per night. Total cost for five nights: $400.

We learned, however, that in order to attend the wedding at the resort, we would have to buy a day pass or stay at least one night at the resort. A day pass costs $75 per person. We decided to book a room for only the night of the wedding. This would have cost us about $220. But, fortunately, I had a free night on my Hotels.com account. We booked the room through my account instead of through the travel agency responsible for planning the wedding, and used the night credit value of $150. Total cost for the night? $70. We’ll be sure to milk that buffet.

Because we have a good travel rewards credit card that we use for basic expenses like groceries, gas, and nights out,  we’d racked up enough miles that our flights cost a mere $32 each way, thanks to the unavoidable fuel surcharge. I should note that we pay the balance of the card each month, meaning even though we use the card regularly, we aren’t accruing any debt but still rack up the rewards points rather quickly. Moral of the story? Think outside the box. Don’t ever follow a recommended itinerary. There’s always a better way.

We optimize our travel points

I mentioned above that our flights on the Mexico trip cost us only $32 each. How? Credit card rewards points. I imagine you’ve heard a bit about frequent flier miles and credit card points. I’m not going to go into depth about that here. I encourage anyone not already using this incredible cheat of the system to look at my friend Travis Sherry’s website, Extra Pack of Peanuts. He’ll have you flying across the world for next to nothing.

I finally learned how to save money

Another Mustache-ian trait that I’m slowly getting better at. I recently signed up with the Qapital app, which can be programmed to transfer money into a savings account based on a number of triggers. I’ve got a trigger set up that rounds up to the nearest $2 every time I spend on my debit card, which is proving to save money pretty quickly. I’ve got another set up as a recurring weekly transfer into my savings account earmarked for paying off our car loan significantly earlier than scheduled.

Thanks for reading! I’ll conclude with a few resources surrounding money management for teachers that I recommend checking out:

Another Teacher Indie article, this one on finding cheap airfare.

The SEC’s page on investment opportunities for teachers is worth checking out.

As is this guide to financial advisors for teachers.