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Budgeting on a Teacher Salary

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If you’ve known me for any length of time you know that one thing I’m extremely passionate about is staying out of debt and using money wisely. For my entire life, my dad has preached to me about working hard and not using credit cards. In middle school, my school actually put all of us through a financial literacy course by Larry Burkett. It’s just always been naturally easy for me to budget, save money, and understand how the “system” works.

However, as I grew older, I started to notice that not everyone had the same mindset about money that I did. A lot of people think that having debt is a natural part of life and it isn’t avoidable. FRIENDS. I am here to tell you (along with my man Dave Ramsey) that it is a LIE. You seriously do not have to be in debt and there IS a way out of it no matter how tiny your budget may seem.

When my husband and I married in late (literally the last day of the year) 2017, we had around $35,000 in overall debt. This debt came from things such as student loans, car payments, credit card payments, etc. We are both teachers so even our combined salaries aren’t anything spectacular. However, here are the steps we took to be totally debt free in 1 year.

  1. Communicate with your spouse (or yourself) and create an account setup system.
    When we first got married, we decided on how we wanted to set up our bank accounts. I am the kind of girl who likes to save save save, and he is the kind of guy who likes to buy a fresh pair of sneakers every month. There’s nothing wrong with either of those ways of life! Because of this, we knew that we didn’t want all of our money just going into one “pot.” We both work HARD and we wanted to have a little freedom to do what we wanted with our money without the other partner feeling neglected or resentful. We decided on this setup:
    Account 1: Our JOINED checking account – Everything that we pay for/use together comes from this account. This includes items like weekly groceries, gas, eating out together, power bill, internet, phone, etc.
    Account 2: Our JOINED savings account – We put a set amount of $ into this account every month to SAVE.
    Account 3: MY PERSONAL spending account – all of my “leftover” money goes here after I’ve added to Account 1 + Account 2. I can choose to save it or spend it.
    Account 4: Brent’s PERSONAL spending account – all of Brent’s “leftover” money goes here after he’s added to Account 1 + Account 2. He can choose to spend it or save it.
    With this system, it is IMPERATIVE that you budget accordingly (see step 2). Setting up our accounts like this helps us to know where every dollar of our money is actually going. All of the necessities are paid for first, and both partners feel free to spend and not feel guilty about what they spend from their own accounts. It’s so much easier to see where every dollar is going when you set up specific accounts like this. It also makes it easier to stick to a budget because there isn’t a lot of wiggle room with our Account #1 and NO wiggle room with Account #2.

2. Set an “Every Dollar Budget” and stick with it. Seriously.
This part takes some planning, but I PROMISE YOU IT IS WORTH IT. Dave Ramsey advocates for having an every dollar budget and the idea is truly life-changing. He even has an app that you can use to try the system for yourself here. This simply means that you know where EVERY DOLLAR of your income is going. When you use the app, it will show you what percentage of your paycheck goes to every single category. You may find some surprises here that will help you spend more carefully. For example, I noticed that I was spending wayyyy to much money on coffee. It was easy for me to see where I could save a few extra dollars every month just by cutting down on my Dunkin’ Donut trips.

I’m not really a math person, but Brent totally is. He helped me sit down and come up with a realistic budget for our household’s needs. We get paid monthly, so I used an excel file and made a list of every debt, every item we use (subscription services, power bill, phone bill, etc.), and any fun outings that we do semi consistently (movies, eating out, etc.) each month. This list may look something like this:
Groceries: $400
Gas: $400
Cable/Internet/Phone: $300
Eating out/Movies: $200
Debt Payments: $700

After we made a list of all of our combined expenses + all of the debt payments that we pay out each month, we then added these numbers together and divided by 2. For example, if our combined expenses were $2,000 per month, we divided that number by 2. Then, I would put $1,000 into our joined checking account and Brent would put $1,000 into our joined checking account (Account Number 1). Next, we’d add a set amount of savings (for example, I’d add $500 from my paycheck and Brent would add $500 from his paycheck) to our joined savings account (Account Number 2). Whatever we had left out of our paychecks after the deposits to account number 1 and account number 2, we would add to our own personal spending accounts. This way, we’re splitting all of the things we share right down the middle – keeping it fair. We’re also saving the same amount – keeping it fair. And we each get to keep some of our hard-earned money for our own spending/saving needs. Now, I know this would look different if your spouse brought in a significant amount more or less than you do. However, I just wanted to give you an idea as to how this could possibly be done and/or show you how it works for us.

Also, on my excel sheet, I would highlight all of our debts in RED and subtract from them each month as we paid them. It was so fun to turn the debt boxes GREEN once they had finally been paid off! I’m a visual person, so seeing my money move in action like this was really fulfilling and motivational for me.

3. Start Rolling that Debt Snow Ball!
Again, my main man Dave Ramsey has this idea that you can pay off debt at lightning speed if you start rolling a debt snowball. Here’s how the concept works: You take the debt that has the smallest monthly payment and pour ALL of your extra money into it. Brent and I both work “extra” jobs so we poured all of our extra money into our first debt. I do work for Teachers Pay Teachers and Brent does both personal training and freelance writing for Upwork.com. Instead of using this extra income for fun money, we used it for paying off the smallest debt. We were shocked at how quickly this “small” debt was paid off in FULL. Now, here’s the trick. Once you pay off the smallest one, you take the amount you were paying on the smallest one and add that PLUS the regular monthly payment to the next smallest one. Once that one is paid off, you take the first little one’s payment (now totally paid off) + the second little one’s payment (now paid off) and throw those payments at the third smallest debt on top of what you’re paying on it monthly.

We were able to pay off an incredible amount this way. It became addictive! We then took all of the money in our savings account (Account Number 2) and paid off a BIG debt at one time! In the meantime, Brent was super smart about doing his research and discovered that there was a government program that would pay off student loans if a person had worked in a Title 1 school for ten years. Miraculously, he had been working in a Title 1 school for the perfect amount of time. The program forgave SO MUCH of his debt! WHAT A BLESSING! It really does “pay” to research student loan debt forgiveness. There ARE programs out there that will relieve you of that burden – even if it’s just by a small amount. Something is better than nothing! However, even if you can’t find a program to pay for your student loans, the debt snowball will AMAZE you if you only stick with it. If you don’t believe me, try it for just a few months and I promise you that you will be hooked, too. Of course, Dave does a much better job explaining it here if you want to read up on it.

4. Suck it up and live differently.
One of the hardest parts about budgeting and getting out of debt is having to tell people “no.” Everything about managing your money is learning how to control your behavior. Contrary to what many people believe, you really do not need certain luxuries to survive. You have to be okay with giving up cable, eating out, or going on vacation for a little bit in order to get out from under the rock of debt. It is not easy. Friends will invite you to do things, your coworkers will buy new cars and fancy jewelry, you may even get tempted by the cruise line emails offering sales and free drink packages. STAY STRONG, BROTHERS AND SISTERS! Wouldn’t you rather “suffer” for a minute than be in debt for a lifetime? Brent and I both sacrificed time with each other and family to make a little extra cash. Brent coaches 3 sports for an additional income, he worked evenings personal training for the first year of our marriage, and he offered his services for proofreading and writing on Upwork. I got my master’s degree in Curriculum and Instruction, wrote curriculum for TpT, and learned how to use Pinterest to market my products to increase revenue. Getting out of debt is not easy or fun, but when we made the last payment on our list of debts…..I’ve never had more fun!

Some of our favorite hacks for budgeting, saving, and becoming overall financially literate can be found below. We’re currently working on Dave Ramsey’s Baby Step #3 (6 months of the entire house hold’s income saved) and planning for big traveling opportunities coming up. It’s not an easy road, but it has made our lives so much “richer” by alleviating stress and enabling us to give to others like never before.

1. Dave Ramsey’s Book: https://www.daveramsey.com/store/product/the-starter-special
2. Every Dollar Budget App: https://www.everydollar.com/
3. Learning God’s Principles for Stewardship: https://crownonline.org/
4. 7 Steps for Financial Freedom: https://www.daveramsey.com/dave-ramsey-7-baby-steps
5. Financial Peace University (several churches offer this class – I read the book + did the materials on my own): https://www.daveramsey.com/fpu/?snid=classes.fpu-b

Dr. Lily Gates