If you’ve only been teaching for a year or two, it’s helpful to know about some of the tried-and-true financial techniques that educators use to make the most of their paychecks in inflationary times. As 2023 gets underway, classroom instructors new to the profession are getting their first taste of living on a teacher’s paycheck in a slumping economy. Fortunately, there are several effective ways to rescue your personal budget and maybe even save a few dollars in the process.
A favorite technique among educators is to refinance any college loans they’re still making payments on. A refinance can deliver instant results in the form of reduced monthly payments and better terms. Likewise, teachers who want to purchase a first home can take advantage of special mortgage rates for those in the profession. If your district offers a thrift savings plan, that’s another way to put income to its best possible use. Review the following details to see which strategies can work best for you.
Refinance Student Loans
Teachers who refinance student loans after graduating and working for a year or two can significantly lower their monthly payments on the loans. That’s because when they use a refi to trade original loans for a brand new one, they get not only lower payments but also a chance for more sensible repayment periods, competitive rates, and lenient terms. It’s a fact that many first-year and second-year educators struggle with personal finances, but it doesn’t have to be that way. That’s particularly true for teachers who graduated from college with outstanding debt.
Take Advantage of Special Mortgage Rates
Most lenders in the US offer special rates and terms on mortgage loans taken out by teachers, police officers, firefighters, and first responders. Not all banks and institutions have the programs, so be sure to work with one that does. The advantages of the programs include a chance to get lower rates, a higher approval rate for those in the program, and less red tape. For newly employed educations, these special offers are a way to avoid the problems associated with only being on the job for a year or so. Additionally, even with a modest income, you might be able to afford the house of your dreams because you are an educator.
Contribute to Thrift Savings Plans
Not all school districts offer TSPs for their employees, but if yours does, don’t overlook the opportunity to build up a savings account at a rapid rate. Most plans include some level of matched donations, usually capped at 1% or 2% of your salary. However, matching provisions are like free money because the district makes the same donation to your account as you make. Over the years, that additional 2% adds up fast, as does the compound interest on the total account balance.
Start a Side Business
Since there are career options for education majors, there’s a time-honored tradition in the educational field: classroom instructors operating independent business ventures. In the digital age, your opportunities are virtually unlimited. Right now, some of the most popular choices for teachers include e-commerce stores, blogging, online tutoring, and content writing.