At a Glance
Public school teachers can manage the rising cost of living through structured budgeting. We explore how to assess net income and expenses, track essential and discretionary spending, compare providers for better rates, automate savings, and build an emergency fund.
Financial Education Is Important for Everyone
Teaching is one of the most noble professions, in which you are responsible for shaping the nation’s future. However, sometimes this effort, hard work, and passion are not adequately financially compensated. Public school teachers have a pay scale range of £32,916 to £51,048. This number is slightly higher for those teaching in London schools.
The increasing cost of living and inflation have made it difficult for households to survive on this meagre salary. Loans for teachers can help with emergencies. However, they are not a long-term solution or a holistic financial solution.
As a public school teacher, if you find yourself struggling to make ends meet, this guide offers invaluable budgeting tips and practical financial solutions. If you have existing debt problems or are looking for ways to save more of your salary, read until the end.
1. Check Your Income
Whether it is at the start or the end of the school year, whenever you decide to start your budgeting journey, the first step is to check your income. With your salary getting credited into your account, many people often fail to understand the actual in-hand amount.
There are several deductions from your salary, including income tax, national insurance and pension contributions. While you might get additional pay through overtime and TLR payments for additional contributions. You can also look at your bank statements for any benefits that you may be receiving, such as the Child Tax Credit.
2. Monitor Your Outgoings
Before you can make a budget, the most important step is to review your expenses. Start by checking the essential expenses, such as council tax and energy, water, and gas bills. Next, check how much you are spending on groceries, travel expenses, insurance premiums (if any) and rent/mortgage.
If you have loans or a credit card, you must factor in their monthly repayments. Also, add the expenses associated with buying clothes, eating out, memberships, and any other subscriptions.
3. Shop Around for the Best Rates
Once you have the numbers in front of you, you can determine how much you are spending and on what. Shop around for the best rates from utility providers, telephone companies, and even insurance providers.
Sometimes, when you continue with your old providers, you may barely notice, but prices often increase annually. Or you might not be getting your money’s worth. So, before your insurance is due, check alternative providers and the rates, terms and conditions that you are receiving. You might end up saving significantly more.
Similarly, checking different utility and telephone providers might also prove beneficial.
4. Automate Your Savings
When you wait until the end of the month to set aside money for savings and investments, you might find yourself skipping the process month after month. Instead, make sure it is the first thing you do every month after your salary gets credited.
Set aside 20% of your income for savings and investments. You can talk to a personal financial advisor or fund manager to help you choose the right investment plans. Make sure you understand the risks and rewards before making a decision. Some low-risk saving options include Cash ISAs, fixed-rate bonds, government bonds, and National Savings & Investment (NS&I).
5. Create an Emergency Fund
An emergency fund consists of setting aside 6-9 months of living expenses. You are not supposed to use this money unless there is a financial emergency, such as replacing a boiler, paying for emergency vet expenses or car repairs. This money should not be used for holiday shopping or going on trips.
Having an emergency fund prevents you from borrowing money at short notice. Usually, short-term loans and payday loans have high APRs, which can impact your personal finances.
6. Weather-proof Your Home
Houses with poor insulation can have higher energy bills. A home with a lower EPC rating pays £570 more annually than a home with a higher EPC rating. So, even if you are renting, you must look for homes with higher EPC ratings (C or above).
If you own a house, look for ways to improve energy efficiency, such as replacing conventional lights with LED bulbs, adding weatherstripping to doors and windows, installing double-glazing, and insulating walls and lofts. While they require higher one-time investments, they offer better returns over time and help reduce energy costs and your carbon footprint.
Final Words…
As a teacher, you are not unaccustomed to abiding by rules and setting goals. You need to bring that same dedication to your personal finances. Setting short- and long-term goals helps you create a budget and savings plan. Always prioritise debt repayment, then create and manage an emergency fund, and finally make long-term savings.
Having a budget will help you stay on track toward financial freedom and make the most of your teacher’s salary.
