11 Financial Tips for Teachers

                                  

There are approximately 4 million teachers in the United States. There are over 50 million students being taught in the United States.  Becoming a teacher is a huge sacrifice and requires specialized education, certification and continuing education for elementary, middle school and high school levels. 

Many teachers are committed to educating their students despite political, state and local roadblocks. In addition, teachers are not provided with adequate resources, tools and supplies for their students. 

Teachers educate students, make out-of-pocket purchases, and tackle social issues such as homelessness, poverty, hunger and teaching students basic life skills. Many teachers spend money to buy their students necessary supplies such: pencils, papers, pens, glue, arts and crafts, snacks, clothing, toothbrushes, hygiene products, field trip fees, toys, and alarm clocks and spend on average $444 a year. However, they not receive reimbursements and only receive a small tax credit. 

The average starting teacher salary is $35,672. Some teachers are forced to obtain part-time jobs to make ends meet and to help cover costs for out-of-pocket expenses for students. 

Here are eleven financial tips to help teachers stretch their paychecks.

1. Create a Budget - A budget will help determine what you owe, what you earn and what you spend.
2. Reduce Expenses - Find ways to reduce expenses. Shop at discount or wholesales stores. 
3. Pay Down Debt - Pay more than the minimum monthly payment to pay down debt faster.
4. Downsize.  Trade in your expensive car for a cheaper used car.  Downgrade your home or refinance to get a lower interest rate.
5. Shop. When shopping at retailers ask for they offer discounts for teachers.
6. Shop online for bargains. Use comparison shopping websites to find bargains at sites like Amazon, eBay or Bizrate.com.
7. Coupons. Use coupons when shopping. Also shop at discount stores such as Costco, Sam's Club or Target.
8. Barter.  Barter services with friends, co-workers or family members who have businesses or who can provide a skill, produce or service that you need.
9. Used vs. New.  Buy used vs. new items.
10. Student loan forgiveness programs. Teachers who work in low-income elementary or secondary schools may be able to cancel a portion or all of their federal student loan debt.
11. Consult a professional – Consult a professional to set current and future financial goals.

Financial Empowerment Advice for African Americans

African Americans spend $1 trillion annually.  One dollar circulates in Asian communities for 30 days, in Jewish communities for 20 days, and white communities 17 days. However that same dollar in African American communities circulates every 6 hours. What this means is that a dollar earned in the African American community leaves that community before the sun goes down. In other communities it stays for weeks on end. 

In addition, a mere .2%, or $.02 of every dollar an African American spends in the U.S. goes to African American owned businesses. Ninety-four percent of African Americans have some type of debt: credit card debt, student loan debt, mortgage debt, or personal loan versus 5% of Americans who have some type of debt excluding their mortgage.

By comparison African Americans spend most of their money or credit on: clothing, appliances, alcohol, cars, electronics, computers, cell phones, clothing, travel, hair care, accessories, food, and household furnishings versus other communities who balance their spending with saving, investing and homeownership. 

Brand name products represent 82% of African American households’ total purchases compared with 31% of private labels and less than 1% of purchases from African American businesses. African Americans are a community of spenders and often times don’t balance their consumer spending with investing, saving and generating wealth the way other communities do.  It’s time to become a community of savers, investors and owners. 

Solutions to help African Americans effectively manage their money:

1. Generate wealth. Some ways to generate wealth are becoming a homeowner, starting a business, investing in real estate, planning for retirement, becoming a franchise owner, capitalizing on compound interest, and keeping debt low. Home ownership is 44% among African Americans, but should be much higher.
2. Hustle. Start a part-time business while working full-time to earn extra money. Use the money to contribute to a retirement account or pay off debt.
3. Do better. Do better than your parents or grand-parents. 
4. Save. Save 10% - 20% each money towards a retirement account.
5. Plan for the Unexpected. Create an emergency savings account to cover monthly bills and expenses for 9-12 months.
6. Passive. Find at least way to generate passive income.
7. Reduce spending. Reduce monthly spending by 30-50%. 
8. Mortgage. Pay off your home prior to retirement.
9. Retirement. Consult a financial advisor to ensure you contribute enough money to reach your retirement goals.

The Best Financial Advice for the New Year

                                     

Millions of consumers make New Year resolutions to lose weight, get a new job or improve their financial status. However, I believe improving your finances is one of the most important goals consumers need to achieve and it needs to become a daily habit.

A New Year is a time to reflect on the previous years and examine what you did right and what you did wrong. Then develop a plan to make changes in your life in specific areas such as finances, career or health.

In order to be successful at creating and sticking to financial goals you have to think about why you created the goal, what you hope to achieve from the goal and if the goal will improve your life.

There is lots of great advice available to help you improve your financial status from friends, family, co-workers, and experts and on the internet. I use the rule that if at least three sources state the same thing it is probably true or works.

When reviewing finances create plans that are reasonable, that you know you can accomplish and that will improve your life for the better. The sooner you start the better off you will be.

You have to change your mindset when you make the decision to review and improve your finances. It will not easy – it will require discipline, accountability and sacrifice, but it will be beneficial to you in the future. This will require changing your thoughts, actions, behaviors and attitudes regarding money. Once you change your mindset, the rest is easy. However, this is usually the hardest part and where most people fail and revert back to their old financial habits. Here is the best advice to help you improve your finances in 2016.

1. Spend less. Track your spending for at least 14 days up to 30 days. Compare this with how much you earn, spend and owe. Make adjustments the following month and rate yourself on the improvements you made. Continue to do this until you are able to have at least 10% - 20% of your net income leftover each month. Think about how each purchase will affect your financial goals, your future, and your family. Categorize your spending. Online banking provides charts and graphs that categorize your spending so you can quickly see areas where you need to reduce spending.
2. Set goals. Set short-term and long-term financial goals that you want and know you can achieve such as homeownership, retirement age, home repairs, starting a business, annual vacation, college tuition etc. Start by creating an action plan to achieve smaller short-term goals then focus on larger long-term goals. When you meet with a financial professional share your financial goals to ensure they become part of your overall financial plan. You have to stick to achieving your goals and don’t give up no matter what. 
3. Analysis. Do an analysis on the products and services you purchase. Verify automatic renewal fees to ensure you still want or need the services. Cancel “gray or ghost charges” they you may have forgotten about, trial memberships, products that state call within X days to cancel, etc. Compare prices for service and ask about discounts and specials to find a less expensive plan for cell phone, cable, internet, utilities, credit cards, web hosting, email provider, insurance, childcare, etc.

4. Emergency Fund. Save more. Many people go into debt because they have no savings and are forced to use a credit card to pay for unexpected expenses. You will need a safety net to help you if any unexpected expense arises or you become unemployed. Create an emergency savings account to cover your bills and monthly expenses for at least 9-12 months.
5. Review retirement. Social security will not be enough to live on during retirement and you will need another source of income. Maximize contributions at least up to the percentage your employer matches. Rebalance your portfolio once a year to minimize losses and ensure you remain on target to reach your financial goals. You will need at least 20-30 times your salary in your account at age 65.
6. Pay down debt. Pay for most items with cash. Use credit for emergencies. Keep credit card balances at 20% or less of the credit limit. Send more than the minimum monthly payment for loans and credit cards.
7. Seek professional advice. Hire a lawyer, CPA, and financial advisor to help you set financial goals, effectively manage your finances, maximize your tax liability and lower your risk of audits and legal action.  
8. Insure. Purchase life, health and disability insurance. Review policies each year and ensure you have adequate coverage. Update beneficiary information yearly or when a life event occurs (birth of a child, divorce, death, etc.)
9. Withholdings. Review your withholding status. Adjust as needed based on life events (death, divorce, birth of a child, adoption, new job, reduced benefits, new business venture, etc.). Consult a CPA to find ways to reduce your tax liability.
10. Credit History. Order a copy of your credit reports every 12 months to check for any errors or accounts you may not be aware of. Fix any errors and setup payment plans for past due accounts.
11. Estate Planning. Setup an estate no matter what your income to ease the burden of handling your financial affairs when you die. Create a will and advanced medical directive. Create a trust to reduce estate taxes and clearly identify how, when, where and to whom you want your assets distributed.
12. Military Status. Read letters received from service providers or creditors when you return from active duty. Terminate your power of attorney when you return. Review state and federal laws that protect military from predatory or unethical business practices by debt collectors. Get current or past due bills and dispute errors to maintain your credit history. Utilize military resources to help get your finances back on track.