QUESTION: “I’m a single, pre-kindergarten teacher that loves her job but I have trouble making ends meet, especially during the summer months. I get paid twice a month—roughly $1,200 each paycheck. My take home pay per year is about $24,000. What can I do during the school year so I can live comfortably during the summer and not worry about my finances?”
-Jennifer, New York
ANSWER: Summers off, lots of vacation time, a nice benefits package…being a teacher definitely has its perks. In fact, according to MetLife’s annual Survey of the American Teacher, 62% of teachers surveyed said they were very satisfied with their careers.
The downside to teaching? Once the summer rolls around the paychecks stop appearing in your mailbox, making budgeting—at least for a few months—a bit of a headache.
According to Danny Kofke, author of “How to Survive (and Perhaps Even Thrive) on a Teacher’s Salary,” “paying yourself” is the key to staying afloat during the summer months.
In your particular example, in order to pay yourself, More…
Today’s Mini Money Makeover candidate had what every financially secure person should have-a savings to fall back on in case of emergency. The problem? All of her money was going into that savings account. She was scared to invest. Her money wasn’t working to make her more money. Have the same problem? Watch the video below for some helpful tips.
Starting this week, every Thursday I’ll be dedicating my blog post for the day to answering one of your financial questions. This week’s comes from Patsey in Woodland North Carolina. She writes:
I have a 22 year-old daughter who begins work as a nurse in July. I have recommended the asset allocation (early career in your book The Difference) after she saves up 8 months in expenses in cash or money market fund. Do you have a better recommendation or did I miss the mark?
Answer: In a perfect world, we would all have 8 months in living expenses in the bank. The reality is however, that putting that much in the bank, especially when you’re starting out, can be a daunting task.
Yesterday Karen Blumenthal stopped by my radio show to discuss her new book “The Wall Street Journal Guide to Starting Your Financial Life.” Starting small, Blumenthal says, is a key thing for workforce newbies to remember. “The first paycheck you might have immediate living needs…you don’t want to run up debt. You need to commit some of each paycheck to build that fund. Start with even $25 and then increase it. In every paycheck you should aim for as much as 10%. If you can’t do that right off the bat start with what you can do,” said Blumenthal. More…
What’s $7? Enough, evidently, to get me taken to task by my pals David Bach and Carmen Wong Ulrich on this morning’s Today. This was the question from JP in Odessa, TX:
“I want to refinance my wife’s car and her current interest rate is 7.4%. I am the cosigner for her. If we refinance her car, will that lower our credit score? We only owe $15,000 which is less than the car is worth. The reason I am asking is that we plan to purchase our first new home this year.”
I said yes. A car refi is a a no brainer of a transaction. It costs about 15 dollars and takes about the same amount of minutes. I also checked with the credit bureaus to make sure that this swap would not affect JP’s credit – something I would not want to happen in light of his desire to go mortgage shopping soon. They assured me it would not as long as he did the shopping within 30 days and replaced the loan with another the same size.
The others on the panel? They disagreed with me. It’s only $7, David said and Carmen agreed.
More…
Saving – both for retirement and for college – seemed to dominate this week’s installment of Money 911 on Today. Watch the video below to see our take on 401(k) rollovers, 529 plans, and whether the money in your investment accounts is safe.
