“Financial freedom” (also called financial independence) and “teacher” aren’t words that most people associate together. Not trying to brag on us here or anything, but “overworked” and “underpaid” are often more the go-to images of an educator than “working because she wants to”. Financial freedom for teachers is just not a trending phrase, despite the desperation of many teachers to get out of the classroom, either temporarily or long-term.
And yet, in some really important ways teachers are in a really, really good position to gain financial independence. So don’t let people tell you it’s impossible. There are more teachers out there who have achieved financial freedom than you may believe, and I’ll be highlighting some of them in a future post. Right now, here are some of the reasons why teachers can indeed achieve financial freedom.
NOTE: this post doesn’t deal with the insurance issue. I’m still researching how insurance fits into the picture. If anyone has decent insurance options, please feel free to comment below. I would love to hear them.
What is “Financial Freedom for Teachers”?
Before we get into the reasons, though, let’s make sure we are all on the same page. What is financial freedom for teachers? Almost every personal finance blogger will have a slightly different definition, so I’m going to just go with mine. When I talk about ‘financial freedom for teachers’, I mean the ability to know that you can teach or NOT teach without money being the deciding factor. So I’m not actually talking about you and your spouse being able to move to Tahiti (although that could be YOUR definition of financial freedom). I’m talking about either temporarily or permanently deciding to go without your teaching income and doing so knowing that the bills will still get paid.
What could cause you to walk away from a job you love? Here are a few things that I can think of.
You have 2 kids under age 3, a husband who travels for work and something’s got to give. You just can’t do a good job of being a mom and a teacher both at this exact moment. (This one happened to me.)
You just had a baby and have only 4 weeks of sick leave saved, so at the end of that time, you have to either go back to teaching or go without income. (This one happened to me.)
A family member becomes seriously ill and needs more help than you can give while teaching full time.
There is a job change that makes teaching miserable.
You are put in a position where standing up for your students or for what is right will put your job at risk. (This one happened to me. Do you see a pattern emerging here?)
You have the chance to move to your dream location and have the adventure of a lifetime, but you don’t know if you will be able to find a teaching job there. (Ahem, you guessed it. This one happened to me.)
And the current winner: Your state and/or district are forcing teachers to return to on-site classes during a global pandemic and it is JUST. NOT. SAFE.
All of these examples have a real impact on your family life and your mental health. And while you might know that you love teaching and you want to return to it someday (Yep. This happened to me!) – or not – financial freedom is the ability to leave the classroom if you need to.
So, with that, here are the many reasons teachers are actually in a great position to achieve that.
Low salary
Yep, you read that right. One of the reasons that teachers CAN achieve financial freedom is that they have a low salary. That sounds TOTALLY counter-intuitive. I imagine you’re thinking, “So you are telling me that it is EASIER to become financially free with a low salary than a big one? Well, Jill, we need to review basic math and basic logic. Which one would you like to start with?”
OK, you have a valid point, but low salary also means teachers don’t have a ton of income to replace. If a doctor wants to quit work, she often has to replace $150K+ or more per year. But the bonus of the low average salary we teachers earn is that many teachers would have to replace only a third of that – $50K or less to replace their income.
(Not) Keeping up with the Jones
That’s not news to any of us, but another aspect of that might be one that you haven’t thought of. Because pretty much everybody knows that teachers aren’t raking it in, they don’t have the same pressure to keep up with those crazy Joneses that people in other professions may.
Let’s go back to that doctor/teacher comparison, shall we? Let’s say a teacher chooses to drive a modest used Toyota Camry. That’s pretty much standard for teachers, so chances are no one would even notice. On the other had, let’s say our doctor – a surgeon – drove the same car. Don’t you think they might feel out of place parking next to their colleagues’ BMWs, Audis, and Saabs? Now, I know I am relying on stereotypes here. There are teachers who drive BMWs and doctors who drive Camrys. But I would say that isn’t the norm.
And cars are only one aspect of it. What about private school? Ski vacations? Family trips to Europe? Those are just part of what most people assume a high-income earner will do. Teachers, while they may choose some of these more expensive options, aren’t necessarily assumed to be tightwads if they opt for cheaper alternatives, either.
Think I’m making this up? No. In The Millionaire Next Door Thomas Stanley and William Danko, who spent years researching millionaires, came to the same conclusion. If you haven’t read it, you’ve got to. It’s one of the best personal finance books I’ve ever read.
Summers
Final thought: summers. I know, you are sick of people saying, “Why do you complain about what teachers make? You get summers off!” But those summers , besides being an essential part of recharging our batteries so we can go back at it the next year, are a valuable resource to begin closing the gap between your income and your expenses.
Say you decide to start a side hustle during the summer. Something you actually enjoy doing, but can also get paid for. And you spend about 20 hours a week on this side job for about 6 weeks of the summer for a total of 120 hours. (For info on side hustles that can earn you some serious money, check out my posts on VIPKid, pet sitting, indexing or other side jobs that bring in great money.) You start up slowly because it takes a while to figure things out, but that first summer, you earn about $2000 dollars, which is absolutely do-able. That works out to between $15 & $20/hour. Not great, but not so bad, either.
Summer numbers – had me a blast
Now that you’ve got the hang of it, you decide you are going to continue it during the school year, but only about 5 hours a week. After all, you chose something you actually enjoy doing, so why not? But now you are better at it, so you earn an average of $20/hr. That’s $100/week, or an extra $400 a month. Let’s say you skip back-to-school month, and two other months during the ten-months of the school year. That’s still an extra $2800 at the end of the school year. You have earned $4800, and you are now almost $5000/year closer to being able to quit teaching.
And if you have used that money to pay off some debt, your monthly expenses might even be going down as your income is going up. You can start to see how this whole thing could actually work. It won’t be easy, but it could definitely happen.
Bottom line is this: if you are determined to find reasons you can’t have financial freedom, you’re right. On the other hand, if you are determined to find reasons you CAN, you’re right, as well. To a large extent, what you believe is possible will actually influence what is possible.
Even if you honestly believe that leaving teaching is impossible for you in your current situation, there are loads of things you can do to make it a viable option in the not-too-distant future: investing in your retirement funds, paying down credit card debt, buying used cars when an upgrade is necessary, and doing more cooking at home, shopping at nice consignment stores instead of. Little things mean a lot, and even more importantly, they put you on a path you want to follow long-term.
If you want some ideas of side hustles to get started, check out my post on crazy awesome side hustles, high-dollar side hustles, pet-sitting, VIPKid, and my all-time favorite work-from-home side hustle: indexing.
Most importantly, remember: You’ve got this!