Saturday, August 6, 2011

How to live comfortably on a teacher's salary

Alternative title: Way Too Much Info About My Income and Expenses

I was at Magpie Cafe with a friend last week and got into a conversation with two dudes who were at the table next to ours. It's nice like that at small, hippy-dippy, organic/local places - people are open and friendly and willing to talk and ask questions and be, well, human. Unlike the hordes of people at the Westfield food court at Powell station who don't talk to each other at all, but sit elbow to elbow like sardines in a can.

Anyway. These two Magpie dudes talked about their kids who went to CSUS, and I said I went to CSUS, and they asked what I studied there, and I said I was in the teacher credential program, and they got to talking about how teachers are underpaid and not given the respect they deserve, and I thanked them for their support, etc.

The thing is, whether teachers are underpaid or not, they can still live decently. My high school econ teacher showed us in graphs and charts how even a minimum wage earning janitor can be a millionaire by the time he/she retires. It takes a lot of work, of course, but it's possible. I still believe it is possible, even in the economy today.

Disclaimer: I am single. I have no spouse, no kids, no mortgage, no car payments, not even student loans (thanks Mom&Dad!). Although rent is high throughout the bay area, I don't live in an area with the worst of it. I am young and healthy; I'm not on life-sustaining meds. My district has a decent pay scale - although not nearly like the $60,000-$150,000 that Arne Duncan thinks teachers should receive. These things vary from situation to situation, and for the most part, I am lucky. And I know it and am thankful for it everyday. It certainly would be more difficult if my situation was different.

But it's not. And as this is my blog, and my life, I'm going to write about my experience. I have enough to live on, I enjoy nice things on occasion, and I save like my social security is on fire.

Oh wait. It is. Haha!

So a little bit about what my situation actually is:

- I opted for the 10 month paycheck distribution, rather than the 12 month. I do not get paid in the summer (unless I teach summer school). There is no difference between the 10 month and 12 month option except that on the last day of June, you get 3 pay checks instead of just one. I would deposit all three right away anyway, so I went with the 10 month.

- I have very good medical and dental coverage. What that means on a practical level is: I have no copay when I see the doctor, any medications I take are covered as long as they are generic, eye exams are covered and I pay 50% of what my glasses/contacts would cost, and I write a check for ~$20 to my dentist after each visit. Cosmetic procedures (like lasik) are not covered.

- My district matches my retirement contributions, which is an automatic, set percentage from my salary.

- I do have to shell $119 each pay check towards the teacher's unions - local and state.

- I also pay taxes and support the old people now on social security and medicare, like a good citizen.

So at the end of pay day, I'm taking home ~$3,300 for each of those 10 months.

Rent is by far my biggest expense - and for the most part, it can't be helped. I can look far and wide and long, but the cheapest it'll get without compromising the level of security and safety I feel at home, and without getting into a massive commute, is ~$750 a month. Currently, my landlady includes water, electricity, gas, wireless internet, and basic cable in my rent. I do have 3 other roommates, including the landlady who owns the condo I live in. I do have my own room and bathroom. I dislike the dinky fridge space and kitchen storage that I get. There are areas where I have to swallow my pride and make a compromise in order to achieve something else. If I lived in a studio or 1 bedroom apartment with the kitchen all to myself, I would be paying at least $1,200 on rent alone, utilities not included. And I know I won't take up the entire kitchen with just my stuff.

But that fridge needs to be bigger. I cook a lot, which allows me to save in the next area.

My next biggest expense is food. I spent ~$2,800 on groceries and eating out this past year. This expense can't really be helped all that much either. The weird thing is, the healthier and less I eat doesn't necessarily mean I'm paying less for food. This is why I started growing my own basil. That's a start at cutting costs here, but it depends on whether you have the space for a garden or not. Once again, luck. I can, however, eat out less, and I'm working on that. I've vowed to not eat out next year unless it's with people. Because then, there's more worth in shelling out $15 for a salmon salad that I could have made at home for less than $5.

Third biggest expense: gas, car maintenance, and other auto expenses; ~$2,400 last year. I include parking and bridge tolls here, but not insurance or registration. I'll tackle that separately. This next year, I'm biking/BART-ing to school every day - yes, even in the dark. I'm debating whether I'll still do it in the rain. Maybe I'll just get mud guards and a good poncho. Or maybe I'll cave and drive on those days. But the comparatively low BART ticket costs will definitely save in gas money.

The last category that rounds out my big expenses, although I don't actually consider it an "expense" technically, is what I contribute to my parents in their old age. ~$350 per pay check. This not only helps to cover my share of the insurance and registration - which is in my parent's name because my car is in my parent's name - but covers the "Asian Filial Duty/Guilt Trip" responsibility on my part. My parents work hard and brought me up to the best of their ability. They supported me through school and those first few years right out of college. They deserve some love back. That, and the recession has done horrendous things to their retirement funds.

A note about insurance: I don't have life insurance. I won't get life insurance until there is someone in my life who won't be able to live comfortably without relying on my income. It's not needed. I do have car insurance. HOWEVER: did you know that you can haggle the price down? When I was a student, I flaunted my good grades and that fact that I'm a girl. Now, I flaunt my excellent credit rating and accident-and-ticket-free record. My dad's agent also gives us an additional discount for the three of us together.

So let's tally that up: ~$9,000 + ~$2,800 + ~$2,400 + ~$3,500 is approximately $17,700 in expenses so far.

Everything else is pretty flex: I supported my church, friends on missions, Charity Water, and Operation Christmas Child this past year. I need to wear clothes, and use office supplies. I've been on airplanes a few times this past year and apparently they make you pay for that. I've bought books and magazines occasionally, and subscribed to a newspaper. I've bought canvases and gardening things, which I list in the "home improvement" category. I give gifts to my friends when they let me crash on their couch, or when it's their birthday, or when they got married, or when it's Christmas, because, you know, otherwise I wouldn't have friends. I have a cell phone and I ACTUALLY PAID FOR TEXT THIS YEAR. I need to buy soap and shampoo and toilet paper and dish detergent and sponges, because I'm not that much of a hermit. I went to museums and zoos and the kind of parks that make you pay to enter.

All of that totaled up was less than $3,000 for the year. If you're keeping track, I still have a good $12K left over.

Which gets funneled into my Roth IRA or stocks account or high interest savings account. Like I said before, my social security is on fire.

Still, though, HOW do I do it? Well, there's basically only two money rules I follow. First: If I don't have the cash, I don't spend it.

I watch out for traps like, "next month's pay check will pay for it" or "it's cheaper if I buy more." Because it's NEVER cheaper if you buy more. One pre-made salad in the deli section may be $3.99 each if you get 3 of them, but I only wanted one at the regular $4.99 price. If I bought 3 of them, it would be $11.97 subtotal and I would have two extra salads I didn't want. Although, I guess a nice thing to do would be to give those salads away to a homeless person on the curb outside of the grocery store.

But that leads to the second money rule I follow: If I can't take care of myself and the resources I am blessed with, I can't take care of anyone else.

Money tips and tricks are very practical. I do look for deals, and shop in season, and I never buy any non-essential item unless it's on sale. However, there's a huge mental game played out as well. I view money as a tool and a weapon that can get used up if I'm not careful with it. I don't assume it will be replaced, especially not in this profession. At the same time, I don't value it like our consumer culture has taught me to. I have plenty of fun, and do plenty of good work without any money at all. Often times, I appreciate life a lot more when doing something that doesn't cost a cent.

I'm pretty much at the limit of the amounts I can save without being a total penny-pinching scrooge.  So the next step? To increase my earning potential. Story to be continued...

DISCLAIMER: I would totally NOT turn down a higher salary schedule for teachers, if that ever comes to pass.

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