One of my favorite activites with my dad used to be heading out on a Saturday to look at real estate with my dad and his best friend Larry, a local real estate agent. You never knew what you’d find. It is possible that on a few occasions when the key didn’t work, the two 70+ men would hoist me (considerably the youngest and slimmest of our trio) through an unlocked window to we could enter an unoccupied unit. (If any of you are looking for an example of white priviledge, I am exhibit #1. It was an adventure to us, and we knew if anyone ever DID end up calling the police on us – which they never did – we could explain what we were doing and they’d be fine with it! Just saying – wouldn’t have worked that way for some of my friends.)
Fun AND funds!
Soon after I bought my first investment units, it occurred to me that It would be great to get a cut of the commissions. I loved real estate investing and planned to continue it for a long time. It didn’t take a lot of brains to figure out that I was going to end up paying 10s of thousands of dollars in commissions in the future years. So I set out to get my license and became a full-fledged feal esate agent.
It was a blast. I don’t mean to say it was always easy, because it wasn’t. But it was absolutely a blast. My gosh, I got to do something I was willing literally break into a house to do. AND people were paying me for it.
Teaching was my first love, and I knew I wasn’t going to quit the steady pay check and deep fulfilment I got from the classroom. But I sold real estate pretty much full time in the summer and then part time during the school year simply because I really liked it. I would rather work with clients than watch TV in the evenings, so that’s what I did. It also gave me a really valuable perspective to take back to my students, and I’ve spoken at career days and other activities as needed. Plus, selling real estate allowed me to save enough money to pay for my M.Ed. in cash.
Lovin’ it
I’d say there were two really important and inseparable lessons I gained from my real estate agent side hustle. First, do what you love. Second, even things you love are sometimes only for a season, not forever.
I’ve already explained that I loved selling real estate. It didn’t get old. I didn’t get tired of it. It was an absolute blast. Every day (or almost every day – nothing is perfect) that I went into the office, I was excited to see what would happen, who I would meet, and what houses we would see. Honestly, I probably could have kept doing it forever.
But the second part of the lesson entered in, as well. I knew deep in my soul that I wanted to be a mom. I knew it more surely than just about anything in life. And so I decided that I would become a mom, even on a teacher’s salary, even as a single woman, even no matter what. By night, I dreamt about adoption. And by day, I made changes in my life to ensure it could be more than a dream.
Good-bye
There were a lot of steps in the process, but the bottom line is that since I was already a full-time teacher, I was going to have to choose between selling real estate and being the present, involved mom my child would need.
Today, I am the mom of 3 kids. My sweet wonderful oldest son who made my dream of adoption a reality and a biological daughter and son whose dad I met while I was in the adoption process. I look at my family, even on our WORST days (and there are some tough ones) and feel absolutely no regret for giving up a side job, even one that lit me up.
Being a real estate agent was great, but it was for a season, and for me that season is long over. I’m thankful for what I learned, what I earned, and how it changed me. I got to keep all of those gifts. But I’m much, much more thankful for what has come since.
My wish for you is that you find a side hustle or business that you love as much as I loved selling real estate. And that if you then find something even better, that you are able to leave it behind without regrets.
As you build your side hustle, whether you love it, tolerate it or hate it, please remember one thing: you’ve got this!
I do NOT want to write about this topic. Although I’m a firm believer in having a will, I hate the thought that my readers feel it necessary to prepare their wills before returning to school. I am going to encourage every worker to look at every possible option before returning to a job where you feel this is necessary. OSHA, mental health leave of absence with a letter from your doctor, FMLA, sabbatical to pursue education. Pull out your contract and actually read it to see what your rights are. To paraphrase Dylan Thomas, “Do NOT go gentle into that good school.”
With that said, having a will is essential if you have children, a partner, or just want to be able to decide where you assets go should anything happen to you. So whether or not you return to an unsafe situation, this is the 2nd best time to get a will in place. (If you are wondering when the absolute best time to draw up a will is, the answer is “Yesterday”. Since that’s not an option, let’s go with today.)
Please note, I am NOT a lawyer, and wills are state-specific. You must verify this information, but sometimes just having a starting place makes things a bit less scary. That is what this article is for, not for being the only resource you need to consult.
First of all, why is making a will important? If you die without a will (or intestate, as it is called in lawyer-ese) the courts will decide who receives not only your possessions, but also who will have custody of your children. I don’t know about you, but I absolutely want a say in who would raise my children. That is why about 5 years ago, we buckled down and updated our wills.
Options for making a will
You can have a lawyer craft a will, but unless you have an extremely complex will or a high net worth (like over $1 million), many people use an online template or software. NOLO and Legal Zoom are options for a simple DIY will. NOLO’s online will can be purchased for $59.99 and used to craft multiple wills. It is rated 4.3 out of 5 and reviewers say it is “detailed” and “easy to use.”
Legal Zoom is another option. On one site I checked, it was rated 3.5 and on another 4.5. They have three levels: Basic will $89, comprehensive will $99, and $179 for the estate plan bundle.
There is no set price for a lawyer to create your will. It will depend on location, choice of lawyer, and complexity of your estate. When we had our will done in small town Indiana about 5 years ago, it cost about $500.
Whether you choose an online will or a lawyer, you will be guided through the steps so you don’t forget anything major. I definitely do NOT recommend just writing one up for your self. That, my friends, is a recipe for disaster.
Some things you should probably start thinking about (if you haven’t already) is who you want to be your executor (the person who will execute – or carry out – your wishes after your death) and who you want to be the guardian of any underage children.
Think about the children
Of course, you are going to need to talk about this with your partner. Be prepared because this can obviously be a touchy subject. Don’t just settle on your closest family member without considering other issues. For example, who is best capable of caring for your kids? Who do you trust to raise your kids with values similar to yours? Who just makes you feel “good” when you think of how they would care for your children?
If you are hesitating between a couple of possibilities, think about what would cause the least disruption for your kids. For example, if they would have to move to another school or state, it could add to the trauma of an already tragic situation. Finally, this is not the time to worry about hurting someone’s feelings. Make your choice based on what is best for your child(ren), not on who believes they should be the guardian.
As for us, because of age, health, and differences in priorities, we felt comfortable with only one of our family members being named as a guardian. But we also asked some dear friends if they would be our ‘back-up’ plan if that person were unable to be a guardian for any reason. These are people who also have experience with adoption (we have one adopted and two biological children) as well as very similar values to us. While we chose a family member as our first choice, we definitely felt comfortable with the idea of our dear friends caring for and loving our children.
What is a trust and why you might want one
If you have minor children, you may also consider a trust and a trustee. A trust is an arrangement that allows a third party (the trustee) to hold assets on behalf of and for the benefit of a beneficiary.
If you don’t create a trust, it may very well be the courts, and not the guardian you have chosen, who controls your assets, even if you leave them to your children. Even worse, in most cases your child will receive control of those assets when they turn 18. I don’t know many parents who would trust an 18 year old with 100% control of their inheritance.
I have two horror stories here to help you understand just how important this is.
One of my students was devastated when he lost his father during his senior year. When he turned 18, he swiftly bought a brand-new muscle car with some of his father’s life insurance money, which he received as part of the estate. He sold it shortly afterward, losing thousands of dollars and also berating himself for having made a poor decision. Later, he told me that he bought it because he thought it would make him feel better, but it didn’t. He just wanted his father back.
Another family friend lost one parent as a child. At age 18, he received access to his entire inheritance. Unfortunately, he spent years pouring tens of thousands of those dollars into a substance addiction. He was a young man with access to a LOT of money, and his surviving parent could do nothing to stop him from using it as he wished. No parent would ever give his child access to that kind of money if he knew they would use it to harm themselves. Unfortunately, things change during the course of years, and grief can cause even the most reliable and level-headed child to make bad choices.
According to Monroe, Wallace, and Morden, there are other complications, as well. “A court guardianship also imposes numerous restrictions on the guardian’s use of the children’s inheritance. Every expense must be documented, audited and approved by the court. The guardian must file regular accountings and post a bond with the court. And because the court must do its best to treat all of the children equally under the law, it is difficult to make exceptions for each child’s special and unique needs.”
I am not a lawyer and can’t tell you if your specific situation warrants the extra expense of a trust. However, it is imperative that you know it exists so you can do further research.
In some states, the trust (or trust component) can be included in the will. Again, check on the laws specific to your state.
Note:
My husband and I have a trust for our children specifying under what circumstances they can receive their inheritance. We set the age MUCH higher than 18 because we wanted our kids to mature before receiving it. However, the trustee has the power to pay for schooling and other expenses he deems prudent. Also, in our case, the trustee is not the guardian of the children, simply because we didn’t want to add one more thing to their responsibilities. We named a separate trustee. Again, this is merely what worked for us.
Other documents
Once you have a will sorted out, you may want to think about a living will, proxy, and DNR. However, we will tackle that in an upcoming post. End of life decisions are highly emotional, and the last thing we want is to give you too much info and have you completely shut down. We’ll get there, but not today.
Take a deep breath, and give yourself permission to feel whatever you are feeling right now. It is not uncommon to be inexplicably exhausted when you start thinking about such emotional topics. I have linked some additional info below, if you want it. But if your head is already swimming, don’t do that right now. Give yourself a bit of time if you need it.
Most importantly, remember. I believe in you. You’ve got this!
This is “The million dollar question” according to a commenter in one FB group. I refrained from pointing out that we all WISH it were a million-dollar question. The good news (um, good????) is that how to replace a teacher’s salary is definitely NOT a million dollar question.
That doesn’t keep it from feeling like a million dollar question to anyone trying to figure out how on earth we get out of teaching.
If there were an easy answer, I wouldn’t be writing this post. Every teacher would just figure it out and do it. (We really are NOT as dumb as most legislators seem to think we are.) But there isn’t an easy answer. In most cases, it is going to be tough. In some, it might be impossible. And then one just has to make a decision. Is the risk of going back to school is greater or than the risk of not making enough money to pay the bills?
But for most people, taking things step-by-step and breaking it into small sections will help.
What do you need to replace?
First, find out what you really need to replace. Is it really 100% of your salary? Instead, could you can reduce your expenses to give yourself a bit of breathing room? If you want more details on how to compare income with expenses, check out my blog post here. Also, even if you don’t think you can give anything up, sign up for a free 5-Day Found Money Challenge to help you lower your monthly bills. It will walk you step-by-step through how to lower your monthly bills, even without changing your lifestyle at all.
What if you have tried to lower your bills, and you still need to make 100% of your current salary – or more? Ideally, you hit the jackpot and find a job that out and out replaces your benefits and salary. They are out there. Here is one of my favorite job boards, which focuses on ed tech (usually remote) jobs for teachers.
Most of us are going to need to be a little more creative. And it won’t be easy. But in most cases, it is doable.
Your Magic Number
If you can’t find a job right away, but need to get out fast, you may need a variety of options to mix and match so that you can finally meet that magic number. And what is that magic number? Let’s break it down. Take your yearly salary and divide it by 50. That will give you the amount you need to earn each week to set aside money for taxes and still equal your original take home pay. Do NOT base it on your take home pay unless you plan to set aside 25% of what you earn for taxes. I have also included 2 weeks of vacation because I like to be conservative. And we all need a break now and then.
Some of these might be actual ‘jobs’, while others will be side hustles that you do on your own. I am going to refer to them generally as Income Earning Activities, or IEAs. Most likely, you will need to have some IEAs that provide a fairly high number of steady, predictable hours but do not pay as well per hour. Then you are going to make up the remainder of the amount with IEAs that pay more per hour, but don’t offer as many hours or are less predictable.
Allison’s plan to replace a teacher’s salary
Let’s look at a real-life example. Allison (not a real person) makes a yearly salary of $55K at her teaching job. She has cut her expenses as much as possible. Unfortunately, transferring to her husband’s insurance increased their monthly expenses again, wiping out her gains. So she is looking to replace the full 50K. She hopes to return to teaching second semester.
When we divide that by 50, we get $1000 per week. Holy cow! This is going to be tough.
After spending about a week scouring online jobs and applying, Allison is able to get a full-time job online paying $18.50 an hour. (Here is a link to an example job that teachers would qualify for.
She is working full time at $18.50 an hour, so she now has $740 of that magic number covered. The downside is that this is a temporary 6-month position. However, she is really just planning to use this job to cover the bills until she can get a permanent position, so that doesn’t concern her.
She now needs to cover $300 per week. There are not many families in her area that can pay for teachers to help in the evenings or on weekends. She is able to find one family that needs evening help and can pay $20 per hour. She will be supervising and helping with homework (not teaching) for 3 kids two nights a week for 3 hours each night. That gives her an additional $120 per week.
(NOTE: When I create scenarios, I do it based on actual research. I also try to present them conservatively. I would NOT recommend a certified teacher charge less than $40 per hour for working with three kids. However, in this situation I am lowering that amount considerably just to build in a bit of cushion. Based on my research there is a big demand for teachers to do in-home support. Charging $20 per hour would be on the extreme low end of the scale. In some areas, I have heard of parents paying over $80/hour for an experienced, certified teacher.)
We are now $180 per week below what we need. Allison decides to try out Shipt. She can work for Shipt on Saturday mornings and Sunday nights. She has heard that Friday-Sunday is the busiest time for Shipt, with Sunday night being a peak time. That works with her full time job and her part time arrangement with the family, so she applies.
Although it varies a LOT, she has heard that Shipt shoppers can average $17 per shop. Since each shop usually takes about an hour, that’s about $17 per hour. However, those are people who have a lot of practice. Since she doesn’t want to be left short, she figures that she will count on $12 per hour from Shipt. Again, we are building some cushion in. That means she plans to do about 15 hours of Shipt per week. That is a LOT, but with 5 hours on Friday and Saturday, plus 3 hours two other nights during the week, she will reach her goal with some cushion. If she earns her $180 faster, she can knock off for the week OR put that money aside in case she has a slow week at some point.
Big reminder
This is a big one. We are figuring everything here based on gross salary. That means that when Allison puts the money in her account, it will seem as if has more coming into her pocket than it seems like she needs. Why? Because while her employer WILL take out taxes, her side hustles like Shipt, VIPKid, and the families she is working with will NOT. She needs to take about 25% of her side-hustle income and put it into a totally separate account so that she won’t get a big, bad surprise next April 15. She can put it in an account that will earn her a little interest, but it should NOT be in any kind of investment that could lose value. Just a plain-old bank account so it will be there when she does her taxes next year.
Real Life
But she doesn’t really like doing Shipt. And it doesn’t pay nearly as well as her other jobs. She decides to try to work her way out of doing Shipt, or at least minimize it. Allison has always loved reading, and she has heard that you can build a full time income by indexing non-fiction books. She knows it will take a while to build a clientele, but it sounds like a great fit for her that she can continue even if she finds a full time gig.
But, in the interest of keeping this a real-life scenario, we have one more curve ball to throw at Allison. Her full-time job doesn’t start for a few weeks, so her first $740 pay check will come 3 weeks after her last pay check from her teaching contract. That leaves her $2240 in the hole.
The good news is that she didn’t wait for her teaching contract to act. She has been doing Shipt for 4 weeks already and started working with the family 2 weeks before her last teaching pay check. That means she saved up about $1500 from Shipt (she was able to work more when she didn’t have a full time job) and $240 from the family. She still has $500 to cover.
Allison gets a little worried until she remembers that she received a promotional add that would pay her $300 for opening a new bank account with direct deposit. She takes an hour or so, opens the new account and uses it for the direct deposit of her new job’s paycheck.
She is $200 short, but she decides to do an extra 2 hours each week on Shipt until she makes up the difference. Even though she does have $1000 in her savings account, she would rather work the extra time than dip into that.
So there you have it. It is a completely made up scenario of how to replace a teacher’s salary. But it is based on research and real numbers. If you have a scenario you want to tackle together, comment below, and we’ll do our best to work through it. I can’t promise we will come out in the black, but we will do our best.
And remember. This isn’t going to be easy for any of this. But I believe in you. You’ve got this!
OMG. Yeah. As I write this, the US is barreling full tilt toward opening schools with a pandemic raging out of control. As I look through FB, my friends and colleagues are freaking out. And the very first school corporation in Indiana just made the call to go 100% virtual this fall. I’m praying that all the rest follow suit. But if yours doesn’t and you are in a position where you just can’t return to school in person, here is my best advice to help you quit teaching without ruining your life.
I have been researching personal finance for about 20 years now and side hustles for about 2. Here I’ve tried to assemble the best information I can as quickly as I can. That doesn’t mean it is complete or error-free OR right for your personal situation. You need to make your own decisions and do your own fact-checking and due diligence. But I hope this will spark some ideas and at least provide resources and a starting point for teachers who feel like they must leave the classroom or who have been shaken into the feeling that they may have to in the future and want to have a plan in place.
There will be a lot of links to other posts that might be helpful, either from my own site or others.
Please help me to provide the best info out there. If you have a valid suggestion for insurance or a company that is hiring for LEGIT work from home positions, comment below. Posts about MLMs, direct sales, self-promotion, or other comments that just seem scammy will be deleted. Thanks!
Step 1 – Slow your roll
DO NOT quit teaching or resign from your position unless the return to school is almost immediate. In my home state of Indiana, districts just today (July 13) started re-evaluating their decision to physically open schools. I believe that other districts will soon do the same. The last thing I would want for you would be to resign and then find out that your school is going to be 100% virtual to start the year.
That doesn’t mean that you can’t take action. On the contrary, following the steps below will put you in in MUCH stronger position to walk away on short notice if you decide that your district is not taking adequate steps to protect you.
Step 2 – Communicate
With your partner
If you have a partner, this should probably be the first person you communicate with. Do they share your concerns? If not, you are going to need to work together to figure out at what point you would indeed quit teaching and stay home. Try to put specifics on it, such as infection rate, number of new cases, or specific policies from your district. If you are on completely different wavelengths, it could add serious stress to an already stressful situation. In short, you know your relationship best, but for this to work, you will need to reach some kind of agreement.
With your employer
School districts are in a tough position here, too. They are trying to balance the needs, wants and fears of many groups all at once. However, if you are seriously considering leaving your position, this is important for your principal and HR department to know. They might want to open schools virtually for a few weeks, but be under pressure from another entity (cough cough – US Department of Education – cough cough) or from parents to open in person. If they know that a large number of their teachers are willing to resign rather than return in person, that gives them a realistic idea of how difficult opening will be and might help them to justify opening online. (Normally, I do NOT accept administrations pushing difficult decisions off on teachers, but in cases where it will literally save lives not to open schools, I am not super picky.)
With your union
If you are a member of the union, check with them before you make any solid decisions. They should be working with the administration to help teachers cope with this previously unimaginable situation. Some corporations are offering an unpaid leave of absence for up to a year. Some have other options. You won’t get your best deal unless you inform yourself, and often the union can offer ideas that might not occur to most of us. PS If you are not a member of the union and you don’t have a specific reason, you might want to reconsider that. Just sayin’ 🙂
With your support network, either virtual or IRL
This is a fine line to walk. You don’t want to operate in an echo chamber, but you also don’t want to share your fears with people who will belittle you. And that’s a real concern right now. This is some scary sh*t going on, no doubt about it. But examining our own assumptions is also a healthy thing to do. You know your situation best, so choose carefully who you do – and don’t – communicate with.
If you feel comfortable talking with extended family and close friends, you might want to just see what help and insight they might be able to offer. Do they have experience with making money on the side or a better understanding of health insurance than you? Maybe someone you know would love to pay you to help them manage online education for their kids while they work from home or to deliver their groceries or something else. Communicating with a slightly larger group will help you form an accurate picture of what support you might have.
Step 3 – Take stock of your situation
Leaving a stable profession is not a step you should take lightly. But then again, neither is returning to a classroom full of kids during a global pandemic. So give this some thought, and try not to be ruled by your emotions. The goal here is to focus on fact and get an understanding of the risks and challenges.
as to health risks
To what extent will returning to school put your health or that of your loved ones in danger? Some items to consider are
the infection rate in the district where you will be teaching
the health of yourself and your family members
your mental health
your ability to enforce safety measures in your classroom
the number of students you will be in contact with each day
your faith in the district leadership to be open and transparent, your current financial situation
any potential job leads you already have.
All of these pieces will play a part, and each will have a different weight on the decision based on your particular situation.
Write these down in a format that works for you. It could be a table, a mind map, or a spreadsheet. The important thing is to get the info out of your head and into a format where you can see it and use it to make a rational decision.
and money
This is the other big part. For many teachers, this would be THE major hurdle keeping them in the classroom. This is a whole blog post in and of itself, so that will be coming soon. Keep your eyes peeled for it. For now, let’s just focus on the basics.
You need to know how much money you NEED to pay your bills each month, so I am going to say the dreaded “B” word. That’s right, budget. You must know how big of a gap your quitting would leave between your family’s monthly must-haves and your monthly income. If you are serious about the possibility of not returning to school, it’s time to do the crappy stuff.
Assemble as many bills as you can from online and hard copy sources. Try to have credit card bills and bank statements back for at least 12 months, if possible, so you don’t forget about expenses like life insurance that you might pay only one time a year. But if you can’t go back that far, don’t let that paralyze you. Use what you have.
Figure in any other income you may have – a spouse’s paycheck or unemployment check, child support, whatever – and look at the gap. Now that we know what our situation is, let’s look at insurance.
Step 3 – Ensure your health insurance before you quit teaching
This is the other major hurdle for most of us. If you have a spouse with employer-sponsored health insurance , the first option would be putting your family on that plan. Most of the time a change in employment is a qualifying condition that will allow changes in who is covered, but the cost will most likely change.
Even if you think this is your best option, do some research to 1) be sure you CAN get onto your spouse’s plan and 2) learn how much it will cost.
If you can’t rely on another family member’s insurance, things get a lot stickier. I’m not going to lie: I have not found a great answer here. I am researching it and talking to actual people who are self-employed and have had to get insurance. I will update as info comes in. So far, the best that I have found is the ACA coverage from the federal government. To get more info and find out whether you could qualify, you can click here.
If you are leaving employment with a school corporation, you have the option to take COBRA. However, chances are that it will be prohibitively expensive. With that said, there is NO WAY I would go without health insurance right now unless I was just planning to take the chance of having to declare bankruptcy. If you are in a position that is serious enough that you absolutely can’t go back to school and your corporation will not work with you, that might have to be an option. (Hey, bankruptcy is bad, but losing your life or losing a family member is worse.) But it should be a last case scenario.
Finally, if you know a secret in this area that I don’t, let me know!
Step 4 – Lower expenses (A great thing to do, even if you DON’T quit teaching!)
In step 2, we looked at the gap between your income and expenses. Now, let’s shrink the gap.
Once you know how much your current expenses are, think about how much you could cut. Obviously, if you have kids doing online learning, Internet is a necessity, as is food, housing and a lot of other things.
But what could you do without? Shopping for clothes and non-essentials? Restaurant meals? (I hope that if you are seriously considering quitting teaching that you haven’t been in a restaurant in months. But I know a lot of people have been relying on Door Dash and take out to provide a bright spot in a dreary time.) What about subscriptions you don’t use or may have even forgotten that you have? You’d be surprised what you might be paying for without even realizing it. (If you want to go step-by-step through your money and see if you are paying for things you don’t even use, check out my 5 day Found Money Challenge below.)
This is not going to be accomplished all in one day. You will probably think of things you can do without over the course of a week or more. Just keep whittling those numbers down and see how small you can get the difference.
Step 5 – Create immediate income
In a perfect world, your work would be done. You would have income from some other source and low enough expenses that you could buy yourself some time to breathe. What we are looking for here is money to close the gap between your essential expenses and your income for the first few months that you are out of work. In this step, we are just looking for enough income to fill the immediate gap.
We all know this isn’t a perfect world, so let’s look at other options. What we are looking for in this step is money to fill the immediate gap. If you have an emergency fund, that could be your answer to this step.
If you don’t have any money in savings, yyou need a source of immediate income. Depending on your circumstances, working with a few families that need help with virtual schooling could be a great option. I’ve created a forum for teachers and familiesin Indiana to connect. You can sign up by clicking the links in the previous paragraph. If you are outside Indiana, check FB groups and Google to see if the same thing exists for your state. If not, comment below and I’ll do my best to help you set one up.
Note: Any work that you do as an independent contractor will not have taxes taken out, so it is a good idea to set up a separate bank account any deposit about 25% of income from non-employer sources directly into it. This can keep you from getting a nasty surprise come tax time next year.
There is also an increased demand for delivery workers right now. Besides pizza delivery, these 7 delivery companies might be worth investigating. I know delivery might not sound very appealing, but the key here is to get some income right away until you can put more permanent plans in place.
One of the first things that teachers think of is teaching English online. You can read more about VIPKid in this blog article but based on what I am hearing a TON of new teachers have signed up since the shut down and bookings are extremely slow. So don’t count on this as an immediate plan. Put it in the long-term category.
There will probably be another post on this coming soon, so check back if you need more info on immediate opportunities.
Step 6 – Create long term income
Here we are talking about putting a longer term plan in place, say 3-12+ months. If you are able to take a leave of absence from your job and have your expenses covered, this step might not even apply to you. On the other hand, some school employees will finally be pushed over the edge by the lack of concern shown for their safety and will be looking for more permanent employment.
In that case, you’ll need to do some soul searching about whether this is a good time to create a job for yourself through entrepreneurship, or whether you want to search for another full time job. If you’ve always wanted to start a small business, well, this will be a tough time to do it, but there are some solo-preneur ideas that just might work. They all take some time to start producing income, which is, of course, why they are long term plans.
My favorite solo-preneur idea is indexing, and you can read more about it here. Even with all the hype around work-from-home jobs, it seems to have gone unnoticed. There are other real options for working from home, though. Virtual Assistants are becoming more and more popular, especially those who have a sought-after niche. Some VAs specialize in Pinterest, others in Facebook ads. If you think being a VA would appeal to you, here is an article on 17 specific VA niches.
Otherwise, while a ton of places have been laying off employees, others have increased needs and are hiring. Here is an article about openings from May, and another one from January about some of the best companies for remote online work.
Whatever you decide, remember to make your decision about whether to quit teaching based on solid research and facts, not panic. And remember, you’ve got this!
As part of our Financial independence, temporary retirement dream, our family of five moved to Norway in July of 2019. Now, Norway has a lot of things to love: fjords, mountains, great people, excellent social safety net, playgrounds to die for, and a ton of other things. But the cost of living is NOT one of them. We recently splurged on two packages of boneless, skinless chicken breasts that were on sale. Total cost for just over 3 lb of chicken? Almost $20. Did I mention they were on sale? So planning to move to Norway with kids with almost no guaranteed income was a huge challenge. But almost a year into our 2 year odyssey, we are doing great. While no one can predict the future, it seems as if our financial planning has worked better than we could have imagined, even with the unplanned chaos of a global pandemic.
If you’d like take a peak at how a normal family plans to move to one of the most expensive countries in the world with no income, read on.
Saving money – a starting point
When we decided to move to Norway, I was building my micro-business, World of Wonders. We were living 100% on my husband’s salary because all of my income went back into the business. By chance, I got a job offer from the school where I had previously taught. #pikeproud Although I loved my business, it was just starting out and there was no way that I would be able to make the amount of money we would need to save. Plus, in a stroke of luck, they were offering me my dream job – teaching English as a new language to newcomers.
So step one was increasing our income. Now just earning more isn’t helpful if you don’t keep any of that money. So even though our income increased by about 40%, our lifestyle didn’t. The same day I filled out my paperwork at the corporation, I went to a new bank and started a savings account. My check was direct deposited and never even hit the accounts we paid bills from.
That means we were able to ENSURE that we were saving money. Using any of the money from my salary had to be a conscious choice. Because all of that money was at a different bank, there was no way to lose track or make a mistake and spend more that my husband’s salary. To get to that money, we had to KNOW we were dipping into it.
(Over-) Estimating costs
Once we had some savings going on, we needed to have an idea of how much money we needed to save. I used a lot of resources to estimate food, housing, and transportation costs. But the most important thing here was to OVER estimate them. In other words, I always added about 30% to what our thought our costs would be. I planned $2000 per month for housing, $1500 for food, $700 for utilities. Those were our upper limits. I knew if we stayed below those numbers we would be OK. If we went above in any category, we had to make it up elsewhere.
Another variable we had to consider was the exchange rate. When I was planning, the exchange rate hovered around 8.5 Norwegian Kroner (NOK) to the dollar. I planned everything on the basis of 8 NOK to the dollar, giving us another bit of cushion.
Savings, meet costs. Costs, meet savings.
So now, it was time to get those two numbers to meet up. $6000 per month seemed to be a budget that would cover our expenses if we lived carefully. Although we didn’t have jobs, I had a little income, about $1500/mo. after taxes, from my rental properties That meant that we needed to save $4500 for each month we were living there. But once again, I added a bit more cushion and decided to go with $5000 as a goal. As anyone with a calculator can tell you, that meant that to live in Norway for 1 year, we would need $60,000. For two years, we would need $120,000.
Note: That did not include the expenses to actually move to Norway, which we planned to cover in large part from the sale of our cars (which we were not planning to replace in Norway) and other household goods that would be downsized.
After the first year of saving, we were woefully short, ending with about $70,000 in the bank. (We had started with about $30,000 from an emergency fund and my take home pay was about $40,000 for the year.) Had we gotten accepted into a Masters Degree program, we would have moved to Norway, but I would have hyperventilated a lot over money. As it turned out, we did not get accepted, so our plans were pushed back a year and we had another year to save.
During the second year, we discovered that my husband could put money in a 457 account. (If you want more info on what that is and how it could literally change your life if you work in the public sector, check out my blog post here.) That allowed us to put some money away pre-tax instead of post tax and sped our savings up a bit. I was also able to save more of my income from the investment real estate.
By the last pay check of my job, we had approximately $120,000. We knew that barring massively bad luck, we would be ok.
What we did NOT cut
We were super fortunate to be in a position where we didn’t have to cut to the bone in order to make this happen. Although we cut a LOT of stuff that a lot of middle class families don’t think twice about spending money on (kids birthday parties were simple, we drove 10+ year old cars, didn’t go out to the movies, bought clothes second hand), we did keep a couple of splurges that meant a lot to us.
The first splurge we kept was our cleaning service. First of all, it was way under market price and we had had them for several years. Second, my husband and I both had other priorities, and it was not the time we needed to put the effort into training the kids to do a better job. Robb was focused on traveling more at work to create and sustain a network that would hopefully help him re-enter the job market after 2 years out.
I am a cooker, not a cleaner. I spend a ton of time making homemade meals, freezer meals, and cheap snacks for the kids. I didn’t do the numbers, but I felt like if I tried to do the cleaning, we would eat out more and we wouldn’t end up saving much money in the end.
The second splurge was a family trip to Florida. We did this for many reasons. First, we had never taken a big trip with my parents and we didn’t know when we might have a chance to do so again. Secondly, my parents offered to cover a large portion of the cost, so our outlay was minimal. Third, our family hadn’t been to Florida in almost 10 years, and our two youngest had never been to Disney OR seen the ocean. We wanted my parents to be able to have those memories with the kids, especially since we were moving their only non-adult grandkids to a different continent.
Putting our money where our plans are
Even with a budget of $5000 per month, we knew we would have to watch our expenses carefully in Norway, especially if we wanted to splurge on family trips. And -duh – we were living in Europe, so of course we wanted family trips. Part of the reason we were moving was to create memories as a family.
Our first piece of luck came in the fact that we had planned for the possibility of Oslo prices (which are unbelieveably high). But we actually ended up going to Stavanger, where prices are currently cheaper. So our 16,000 NOK budget ($2000) for housing turned out to be only 14,000. YAY! Win. We could have chosen a bigger place, but the basement apartment where we live is clean and safe, with big windows and a ton of playgrounds in the neighbourhood.
The next piece of luck for us, is the fact that the exchange rate was actually a lot better than we planned for. We figured everything at 8 NoK per dollar just to be safe, but by the time we were over here for a few months, we were getting 9.5 NOK to the dollar. That means that everything we bought was about 15-20% cheaper than we had planned. Again, a little bit more room in the budget. Our rent went down to less than $1500 for every month we paid at that rate, saving us $500 from our budgeted amount.
But the big, huge, magnificent bit of luck was the fact that I actually found a part-time teaching job. In September, a local international school posted a job for a teacher of English language and literature. It seemed perfect for me because it was 70%. In other words, I would have 1 ½ days a week off and teach 3 ½ days each week. At Christmas, they asked me to work an extra half day, so I’m at 80%. My take-home pay turned out to be about 28,000 NOK a month, enough to cover our rent, food and a little extra.
What we didn’t account for
Less money for our stuff
There were several places where our planning missed things. First of all, we planned on earning enough from the sale of a lot of our furniture to pay for our plane tickets over, as well as the cost of a shipping container for the furniture we planned to take. Unfortunately, we were so busy just clearing things out, that we didn’t have time to list things online. We ended up giving away almost everything, except our car.
Again, our car didn’t bring what it was worth. I had planned to sell one car about a month before we left, and rely on one car for the last month. However, things were so hectic we really needed both cars until the very last minute. That meant that 48 hours before we flew out, we were sitting in a car dealership signing the papers to sell our car. I thought we could get at least 8K out of it if we sold it ourselves, but there just wasn’t time. We ended up getting less than 5K.
Cost of carrying the house
In my perfect dream scenario, we would have had our house on the market by the beginning of June. In reality, we had to hire someone to clear out the last of the furnishings AFTER we left. And we didn’t have time to do the little things that needed to be done to get it ready for the market. We ended up spending about $6K for those things. We also had to pay for ongoing care, such as lawn care, after we moved. We paid more than we normally would have because we found a local handyman who was awesome and we really trusted him. His prices were a bit above market, but the security of knowing that he would do an outstanding job and let us know if there were any little things that needed to be taken care of was 100% worth it.
Luckily, it was only about 3 months before our house sold, but that could have been a huge drain on our reserves if it had been on the market longer. (FYI – the money we made from the sale of our house is not included in our living expenses. That is set aside for when we decide to purchase another house. All of the living expense calculations assume that we will NOT use that money for day to day expenses.)
Other ‘at home’ expenses.
The little things we forgot that we would still have to pay for from the US. Life insurance, a cell phone plan so we could call our families, a few online subscriptions and donations (Doctors without Borders and such). It adds up to about $400 a month, which is manageable for us, but could put us in trouble if we hadn’t put so much leeway in our budget.
The big picture
Overall, we feel really good about the state of our finances heading into the 2nd year. I am not a detail-oriented person, so I don’t do a huge by-the-penny budget. But I would estimate that my job covers about 75% of our living expenses.
We are still frugal. For the first 4-5 months, we didn’t eat out at all. We’ve loosened up a bit and splurge a couple of times a month on take-out Chinese food. We eat less meat, and our entertainment is walking to the beach.
We also don’t have a car. I use public transportation to get to work, and my husband bikes to the university. It does make life a lot harder at times, but when we ran the numbers, we just didn’t feel like it was a good idea. Consequently, transportation costs run under $150/month instead of probably $1500/month if we had a car.
There is one other big, BIG thing we did to save money. We sold our house in the US. This was a heartbreak for my husband, who literally saved it from eventual decay. We had to make some sacrifices, and that was one of them. As we mentioned above, it was pretty expensive to keep it up, and even if we could have rented it, we would have had the worry of making sure things were in running order. That’s much harder from another continent.
I never thought that I was financially independent – even temporarily – until a co-worker (also interested in FIRE) commented “Wow! You’re really doing it. Financial Independence, retire early. Moving to Norway. Congrats.”
I paused for a minute, stunned, and then realized, “Yeah. We are.” Maybe not forever, but for at least a couple of years. And we are doing it in one of the most expensive places in the world.
So if you are wondering if it could work for you, I think in most cases the answer is yes. We earned good salaries, but not huge ones. We were out of debt and lived below our means. But most importantly, we chose to believe that it could be done, and spent our time working toward making it happen instead of thinking it never would. I believe that if you are out of debt and have a healthy savings, it can be well within reach if you are willing to do the research and then plan and save accordingly.
