I’m a single teacher, should I do anything differently with my money?

Male or female, single or married – your finances should be an area of focus.

However when you are single, the pressure ramps up a little as the only winner or loser in this equation is you. Because of this, here are four things that single teachers should be concentrating on when it comes to their finances:

 

1. Eliminating debt

If you don’t have any debt to start with, then AWESOME, don’t go and get some. Realistically, you may have debt, so the goal is not to add to your debt level and start reducing it to zero.

But why is this even more important for a single person?

When you are single, every penny counts. If you have a month where expenses are higher than expected, there is no-one there as your back-up or whose income you can use. It’s your savings that you’ll pull from, or if there isn’t any, then credit.

If you have large debt payments in your monthly spending, this makes everyday living tighter, and life can become less fun. It is worthwhile to incur a small amount of pain (socially and financially) to work on eliminating your debt, to then be able to live a “free-er life” when it’s gone.

 

2. Ensuring you have adequate disability insurance

Just as there is no back-up income of a partner when it comes to debt and spending, what happens if you lose your income? If you lose your job, you can find another one (and as you’re single – anywhere in the country).

But what if you become disabled and are unable to work? Who’s going to have your back then?

You need to have disability insurance, and make sure that it’s adequate. “Adequate” insurance should cover at least 60% of your pay should you become disabled. It’s likely you have this through your pension system (Illinois teachers do at differing levels depending on tenure and location of the accident) and your district may offer coverage.

If your district doesn’t offer coverage, don’t assume that your pension plan coverage is adequate. Go into the insurance marketplace and purchase a policy that will cover 60-70% of your income, and that lasts until you are 65. There are other variations in these policies that are covered here.

 

I'm Single. How should I manage my

 

3. Keeping goals in check

It’s hard being single and only having one income. The goals that you see married (or co-habiting) individuals achieving are out of your reach and you may feel jealous.

Don’t let that feeling get the better of you. You’re right – those goals are out of your reach because you can’t afford them. Looking back to point number 1, you need to understand what your income can afford. Don’t go into debt to try and obtain everything. That list never ends.

One way to manage this is to stick to some rules of thumb.

– If you rent or own a home, all payments related to this should not exceed 35% of your income (including taxes, insurance, HOA fees, and mortgages).
– Your debt payments (if you choose to hang onto it and not pay it off) should not exceed 10% of your monthly income.
– Save 15% of your income (including your pension savings) for retirement. (For many teachers, this would be 6% of their income, as their pension would take ~9% of their salary).
 
 

 
4. Have a plan for the next year, but make it a fun one!

While you may have goals to keep your everyday spending in check, it helps to have longer term plans. This is like having a financial plan, but breaking it down into 12-month periods.

What do you want to achieve in the next 12 months? Further your education; land a new job; purchase a house; obtain a new skill; save more? Aim to be a more accomplished person in 12 months and allocate some resources to that. It will not only give you motivation for the future, but if they are career-related goals, then it could provide opportunities to increase your income.

But it doesn’t have to be related to your job.

You’re single. Get out there – meet new people, experience new things and enjoy life. Whether you are looking for someone special to share life with or not, doing these things will provide a balance to your life and make it fun.

These things will require money, so be sure to make room in your budget to do these things.

 

P.S. I didn’t focus too much on retirement savings. This is important, but I cover it in other posts.