Deep Dive Into a Teacher’s Budget


Disclaimer: The statements made in this post are the opinion of the author. They should not be viewed as financial advice. Please consult with a financial specialist before making any financial decisions.
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Teaching is a well known career that doesn’t pay as well as other professionals of the same degree of education. It is also the profession I know best.

That is why I’m starting a new segment of this blog, the budget deep dive, with a teacher’s salary.

The budget deep dive will look at different low paid professional and other jobs to show those that work similar jobs a path to financial security and independence on a doable budget.

Calculating a Teacher’s Take Home Pay

The average teacher’s salary is $58,950. That will be one salary we will look at. But the average starting salary for a teacher is $38,617, which is equally important to look at. So we will calculate take home pay for both salary levels.

First, it is important to calculate your gross pay. This is how much you make before anything is taken out. So for a teacher making $58,950 that would be $4,912 each month. For a teacher making $38,617 that would be $3,218.

Please note that in no situations is your gross pay how much money actually hits your bank account. So let’s start chipping away at it.

First, you have federal payroll taxes for social security and medicare. This tax rate is currently 7.65%. The average teacher will pay about $376 a month (yearly gross pay, times .0765 divided by 12) and the starting teacher will pay about $246 a month.

That leaves us with $4,536 for average teachers, and $2,972 for starters.

Now you have federal income tax. Not counting other deductions and rebates, that depends on your tax bracket. To figure out exactly how much you’ll pay, use this calculator.

Our average teacher would owe $503 per month (yikes) leaving $4,033 and a starting teacher would owe $246 leaving $2,726.

Next we have state income tax, which ranges from 0% in places like Texas and Alaska, to 4.4% in New York. So let’s go with the median number of 2.2%. Just know that yours may be higher or lower.

So at that percent the average teacher owes $108 per month, leaving $3,925 and the starting teacher owes $71 leaving $2,655.

Now that taxes are out of the way, you have deductions from your employer. Some of these are still your money, you just don’t have it to live on each month, like contributions to a 401(k). We won’t deal with those right now in this budget.

The other big expense that comes out is your medical costs. This ranges wildly from $100 for singles (or less on medicaid), to $500 for families, to over a $1,000 for more specific coverage.

Just to have a realistic budget we’ll go with $500 (which is a straight expense regardless of your income), just know that your situation will differ.

That $500 expense leaves $3,425 for average teachers and $2,155 for starting teachers.

While other expenses and taxes are possible, these are the most common, so these are the numbers we’re going to work with. This is your actual take home pay, also called your net pay.

How Much Can a Teacher Spend on The Big Three?

The big three are also known as the three biggest money suckers. These are the places that most of your money goes every month if you’re an average American.

The three biggest money suckers are housing, transportation, and food.

The percentages I reference for how much you can expect to spend on each item can be found on

Let’s look at each in turn.


Housing is by far American’s biggest expense taking up an average of 33% of American spending.

That is entirely too much. 33% of you take of home pay leaves you with too little wiggle room, especially at a lower income earner.

Still, you need a place to live, so I would recommend about 20-25% of you net pay and certainly no higher than 30%.

If you can get lower and feel comfortable, even better.

At 25%, the average teacher is paying at most $856 a month in housing and a starter teacher can afford up to $539. Remember, that that includes taxes and insurance if you are buying a home, so be careful.

While those numbers might sound absurd remember that these are averages, the amount you can afford will vary depending on your circumstances.

That leaves an average teacher with $2,569 per month and a starting teacher with $1,616.

Hopefully, looking at those numbers you see why having a lower housing expense is so important.


Transportation is another biggie. But mostly because people make it big on purpose.

The average amount spent on transportation in a budget is about 16%.

That’s $786 per month for an average teacher, or $515 for a starter. But gasoline is only 5% of the budget, and insurance is somewhere between $100 and $150 most likely.

So what is the bulk of that cost? Your expensive car payment!

Car payments are the most expensive part of owning a car, so the sooner you get out of a car payment the sooner you have more room in your budget.

Just do it!

But let’s assume that you have a car payment just so we have a realistic budget. Once again, adjust accordingly.

That leaves us with $1,783 per month for the average teacher and $1,101 for a starter.

Things are getting tight and we haven’t even made it out of the big three. But we can make it!


Food is the big expense that nobody seems to think about. You have to eat, so we just buy things. But that is not how it should be.

There are ways to lower your large expenses in housing and transportation, but they take time and a lot of commitment.

Food on the other hand is a variable expense, so it is easy to make a change in the net two to three months or sooner.

In other words, if you are tracking your spending for the first time and trying to create a budget, look to food as the first line to cut at for wiggle room.

That being said, food still costs money so don’t underspend and miss out on the nutrition you need to thrive.

If you want to know how much to spend on food, I have a whole post about food spending.

But assuming you’re an average person with a partner or a kid, then the maximum you should spend on food each month is $600 for the average teacher and $400 for starting out teachers.

Please spend less than that if you can and be healthy.

This includes eating out to, so be careful with that.

The lower you can get your food budget, the more money you have for things that matter to you beyond just surviving.

If you spend the maximum recommended amount though, the average teacher is now left with $1,183 and the starting teacher with $701.

Dealing With Other Expenses

Now, after you’ve paid for the big three, you have other expenses. These include your utility bills, internet, cell phone, entertainment, clothing, widgets, electronics, and anything else you want to buy.

How much you spend on each other those is up to you, but if you need help lowering some of those costs, I have a few suggestions.

If your utility bill is high, try taking drastic steps to lower it.

If you aren’t satisfied with you phone bill, don’t buy a new phone every year and switch to a cheaper provider. I use Reach Mobile and I’m enjoying it. You can get a bonus using my referral code K0D6L5CH if you’d like.

Try to negotiate your internet bill at least yearly.

Look into free or cheap forms of entertainment like outdoor activities and more.

Buy clothing second hand and electronics second generation.

Cut out anything that isn’t bringing value to your life.

And teachers, don’t overspend on your classroom, always ask if the school has a budget to buy something first!

Check out this link for more ideas on being frugal.

Now, please remember that you do not have that whole $1,183 or $701 to blow on these things.

For reasons I’m about to explain, the budget for these items should be at most $840 for an average teacher and $485 for a starting teacher. So don’t waste it!

See the example budget below for a break down of each item

The reason you should avoid spending all of it is you also need to be setting aside money for retirement.

Budget line ItemAverage TeacherStarting Teacher
Net Pay$3,425$2,155
Misc. Expenses$300$50
Retirement (minimum)$343$216
Example Budget

There are ALWAYS more expenses than you plan for. Have wiggle room in your budget.

How Much Do Teachers Need to Invest to Retire?

Retirement may seem like a long way off, especially if you are a new teacher, but it is never too early to start saving for retirement.

There are a variety of factors that determine how much you need to save for retirement, most of which I don’t have time to get into here.

Those include how much you plan on spending, how much you’ll get from a pension, will your partner continue to work, how late you will retire, the expected inflation, and so forth.

If you really want to get into all of that, for teachers especially, check out this great post from EducatorFI called How Much Does a Teacher Need to Retire?

For the purpose of this post, I’m going to go with a much simpler answer, and that is the advice from the Richest Man in Babylon by George S. Clason to “pay thyself first” a sum of 10% you income.

If you consistently pay yourself ten percent, over the course of a career you could have half a million in savings, or more.

Now the more you can put in the better, but if you need a place to star–start at 10%.

And the next year you get a small raise, take half of that raise and immediately invest that. You’ll never miss it and it will grow until you are able to retire.

The average teacher would invest $343 per month and a starter teacher would invest $216 per month.

But remember, do as much as you can!

If you want to be a millionaire investing in your 401k over 30 years then you’ll probably need to invest over $1,000 a month.

Start small and build up to it. You’ll get there as you put your mind to it.

The Teacher Advantage

Every profession has an advantage of some kind that can be used to become more financially stable. These are things like high income potential, ability to get overtime, flexibility in schedule, or commission based work.

For teachers, none of those apply, but there is one huge advantage. Paid time off.

Teachers not only get at least two months without mandatory work times in the summer, but also time off around major holidays and usually a week long spring break.

While rest is important, the notion that you deserve to do nothing or just have fun over break is somewhat childish.

That is the best time for you to better your situation.

I have two recommendations, either find seasonal work or build a seasonal business.

A lot of things are open only during summer months. You could life guard, or be a camp site manager, or work at an outdoor theater, etc.

I sell fireworks for the Fourth of July because the time off I have allows me to be there 24/7 for a couple of weeks. And it is a good gig.

Or you can build a seasonal or flexible business. You could own a swimming pool or splash pad, or build a fishing guide company, or an A/C repair service. Whatever you can learn to do that is intensive in the summer that is the business for you.

I’m a notary signing agent because I can choose when to work and work is heavier in the summer.

Use your teacher advantage to create financial security.

The key though is to still stick to your regular budget then invest and save the rest.

Can you make an extra $1,000 a month with a side job? Easy!

That is your whole retirement right there if you invest it right.

Teachers do not have to be poor, you have to be smart.

So put those amazing brains of yours to work!

What are other advantages that teachers have? What other jobs do you want me to review? Tell me about it in the comments below.

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A list of definitions used on this blog can be found here.

Gross Pay: Your total pay before any money is taken out from taxes, insurance, or retirement investing.

Federal Payroll Tax: Tax that is paid on running payroll (paying employees) half of which is paid by your employer and the other half is paid by you. This tax pays for social security and medicare. Please note that if you are self employed you are responsible for the entire tax.

Federal Income Tax: Taxes paid to the federal government based on your taxable income (income that isn’t protected by tax shelters like a 401k or deductions). The more money you make the more you pay in a graduated or bracket system. This is where deduction and rebates come in that create tax returns.

State Income Tax: Taxes paid to the state government based on your taxable income. Each state has different tax rates and rules what is taxed.

410(k): An account offered through your employer that is not taxed upfront, but it is taxed taxed when you pull it out. (See retirement accounts on the definitions page)

Net Pay: Your actual take home pay after taxes and other deductions from your paycheck such as insurance premiums.

Variable Expense: Monthly expenses that are not consistently the same amount. Examples of this are food, your utility bill, and gas.

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