Mid 30s teacher making $75k tracking “every dollar’s job” while raising three kids
Local advice on how to earn, spend, and invest money is hard to find. Many cultural barriers exist for talking about money, yet it can be therapeutic to do so.
Money Snacks – People Stories is a anonymous way for people in Hamilton County to share their financial journey with others.
Note from Skyler: Today’s Money Snack – People Story is edited for privacy sake. I felt this had just a bit too much personal info. If you’re the submitter, I hope you understand!
Enjoy!
Age
My wife and I are mid-30s. Firmly millennials!
Children
We do have children. Two with a baby due any day now. I would say our most stressful thing with kids and money are that kids are simply just stupid expensive. Everything costs more, which tightens the budget and stretches the paychecks more than when we were just DINKs in our 20s.
Pair that with having our first during a pandemic, everything cost more than it used to. Groceries, electric bills, gas, daycare, healthcare, household goods, subscriptions, etc.
I don’t think I can name a specific item we buy now that is cheaper than it used to be (I’m sure there is something, but with everything else it surely doesn’t matter). Our pay is increasing somewhat as we progress in our jobs, but it definitely feels like we’re turning more into penny pinchers.
Living Situation
We own our home having bought our first house mid-2010s. We originally had a 30-year mortgage with a 3.875% rate. We were able to put a small amount down with a generous family loan (which we paid back), giving us around a $630/month payment (we did escrow separately).
We refinanced during COVID to a 15-year mortgage when rates hit near-rock-bottom and nailed a 2.75% rate. Our payment, still sans escrow, is about $930/month now.
As our family continues growing, we don’t anticipate staying in this house forever. But when we do move, we’ll have a ton of equity ready to transfer over to our next mortgage. We’re hoping current and near-future rates won’t destroy our ability to upgrade.
Job
I am a teacher. I’ve been teaching for a little over a decade.
Salary
My base salary, as dictated by the collectively bargained contract between the teacher’s association and school district, is $73,267.
I make a little bit more than that because I have some additional responsibilities and a master’s degree. Which puts me on a different column of earnings.
Salary Growth
When I started teaching, my starting salary was about $35,000.
At the time, when I received my first check, it was the most amount of money I’ve ever had come my way in a single go. After a couple years, a principal mentor encouraged me to get a master’s degree in administration.
“Young teachers have the most money-earning potential of all of us”
Another teacher mentor of mine spoke with me and told me the goal was to make as much money as possible in education (which arguably isn’t much relative to other occupations, of course, but not impossible to make a good living).
After earning my masters, it only took a couple years to pay it back due to the pay increases I now had access to simply for having a fancy piece of paper that cost me about $20,000.
I expect the next pay bumps in my career will be my children leaving daycare, which is through the school system so daycare costs are a paycheck cost, and then if/when I decide to jump up to administration and be an assistant principal somewhere.
I realize I’m in a fortunate position working for a Hamilton County school district as I do make more money than teachers elsewhere in the state. Some of those districts don’t incentivize higher education like mine does.
The fact that I can have a large family, a house, two cars, and two pets, and still splurge on nice things means that even being a teacher can be possible if you live below your means and don’t expect the rich things in life.
Other Income
[This section has been redacted, as it shared too much personal information]
Just know this person very much loves their wife, she’s a badass, and she makes slightly more than he does.
Debt
We have our mortgage, which is our biggest loan. We have about $102,000 left to pay. We have a family loan for our car (paying back with agreed upon terms, but 0% interest!) totaling about $12,600, and a general loan from my side (again 0% interest) totaling about $8,200. That’s it.
We do use credit cards extensively as we have 15 of them. We’re moderately churning rewards and bonuses by keeping track of which card is best to use at which locations depending on the quarter.
We absolutely avoid carrying over any credit card debt by setting up automatic payments every month to pay the statements in full.
I was told by my dad when I first got a credit card at 18 years old that I should treat them like a debit card – if I had $100 in my checking account, but a $500 limit on the card, I only had up to $100 to spend.
I actually didn’t realize at first exactly what he meant because I didn’t realize one could max out a card like that and carry debt to the next month. It just clicked better in my head to use it like a debit card.
Regarding student loans: my family promised to pay for my college as long as I kept my grades up. I worked hard throughout HS to get into college first, then continued that in college, because I knew how big the checks were that my dad was writing – there was no way I would be able to afford that or be able to figure out how student loans worked.
I hope to pay it forward with future family members. My wife’s parents did the same, promising their children about $100,000 for all schooling, which included master’s degrees, so my wife’s schooling was paid for.
I can’t recommend being born into a family that is willing to pay for college enough, but realizing that that isn’t a choice, I would encourage everyone to consider all your options when it comes to paying for debt.
If you can avoid it, do so. If you can’t, aim to pay off the highest interest debt first, then tackle the others. Debt is free money to companies – be a deadbeat as much as you can.
Budgeting
We do! Disclaimer: I do not work for YNAB (You Need A Budget) but I can’t sing their praises enough. When I moved in with my wife after we graduated from our undergrad, we started using YNAB to track our expenses and get a good grip on our financial situation since the parental umbrella was closing.
We had no debt entering our adulthood, so it wasn’t so much a budgeting tool for us as it was a money tracker. We knew, and continue to know, every single dollar’s job in our budget, whether it be for our mortgage/rent, groceries, Taylor Swift concert, next phone, or a Disney trip like a decade from now.
If every dollar has a job, then one can be assured of their financial situation.
Making your dollars work for you usually refers to utilizing interest rates or market returns, but in this case it means literally making sure you have a job for all your money. Important non-negotiable payments get assigned first (mortgage, electric bills, taxes, insurance, etc).
Then daily expenses (grocery, household goods, fuel, etc). Then rainy day funds (automotive, medical, gifts). And so on to subscriptions, big ticket savings, etc.
It’s also a great way to track overall net worth too. YNAB zealots might shun this practice, but we like to have a good picture of our entire financial situation and not just the literal spending dollars.
We’ve been converts for over a decade now and even though the tool costs a subscription, it has more than paid for itself with the financial knowledge and security it has provided us. We have a meeting together at the end of every month to review how much inflow and outflow we have and how much we should consider budgeting for the next month. Sometimes we go over and that’s fine. If we spend an extra $100 on groceries because we bought a bunch of frozen food from Costco to put in our deep freezer, then we just roll over some case from a less-spent category like household goods for the month.
#1 Splurge
Good quality ingredients and kitchen hardware to cook with. My mom was a good cook with the food and pans she bought, but having learned a ton about cooking in my adult life, I realized that pairing the skills I’ve honed over my life and good quality food and a buy-it-for-life tool, I can make amazing dishes for myself and my family.
Recipe calls for home-ground beef from a chuck? Instead of the paste you get at the counter, I’ll spend extra at Kincaid’s to use my Kitchenaid Stand Mixer grinding attachment to make my own ground beef. It makes better smashburgers, hands down.
I get eyerolls from others in our family sometimes for spending say $500 on a high-end blender and I get it – it is definitely excessive.
But we also buy used cars (driving them for 11 and 5 years respectively) instead of buying two brand new vehicles at the highest trim level and having to deal with auto loans and depreciation. Not that anyone in our family has done that recently…
Local Hack
Live below your means. Hamilton County is full of Joneses – don’t try to keep up with them. Save money where you can, like getting water instead of a pop. Share a plate instead of one entree per person (portion sizes are out of control). Find free stuff to do, like walking on our wonderful trails system. Take advantage of warehouse deals to buy more for less.
Favorite Local Restaurant
Patachou (they just opened one downtown Fishers!) – it’s my go to for any random lunch or breakfast. I usually get either the Omelet You Can’t Refuse or the Chicken Salad Sandwich on toasted sourdough.
Savings and Investments
If your company has a match, contribute as much as you can to get the max match. Then, aim to max out IRAs (we chose Roth IRAs). Then, return to your 401k and increase as much as you can. If you have access to a HSA, contribute to that as well.
Don’t do day trading – it’s just legal gambling. Slow and steady wins the race. Bogleheads exist for a reason – VTI is a great fund for a reason. Few people make a ton of money all at once. Lots more people make lots of money over time.
I’ll pick the safer route with my career-choice.
Best Money Decision
Reading the Millionaire Next Door by Thomas J. Stanley and William D. Danko before I graduated college. My aim is always to be a PAW (prodigious accumulator of wealth) and never a UAW (under accumulator of wealth).
If this entire survey was one question about how to better your finances, my answer would be to read this book. Multiple times.
Did you know the top five careers for millionaires include engineer, accountant, teacher, management and attorney.
On Your Mind
Because we don’t have a lot of stressors with money, I’m mostly looking forward to cracking the $1 million mark. We had a lot going our way with our lives, and we’re forever grateful for the great starting position we were afforded with no student loan and a down payment gift from parents.
We plan to pay off all our debt minus our mortgage, and are aiming for that $1 million mark in the next few years.
Not bad for a teacher!
Hamilton County Wealthy
First, I think “rich” and “wealthy” deserve to be defined here. Rich to me is someone who tends to live above their means – they buy a big house, fancy cars, eat out all the time, take vacations, because they make a lot of money and can afford such things. Wealthy to me is someone who tends to live below their means – they buy a house that they need, used cars, cook at home mostly, take advantage of local cheaper spots, etc.
A simple example is this: I feel wealthy because I broke my Apple Watch the other day and can immediately buy another one (and take advantage of a 0% payment structure) without feeling like I have to choose between that and eating. If my daughter broke a bone tomorrow, my wife and I have enough in our emergency fund to pay for it and still go out on a fancy date on Friday.
Of course there is a breaking point, but having the aforementioned ability makes for wealth.
Total Net Worth
It is exactly $712,088.32. Thanks, YNAB.