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Saving Money on a Teacher’s Salary

20 October 2006

This is an old article, but a good one – it’s about a teacher out in California who arrived in the U.S. as part of a family of “boat people” fleeing communists in Vietnam. He’s on track to retire by 55, on a $60,000 a year teacher’s salary (which is probably above average, but he lives in California). What’s his plan? When he was first starting out, he lived with his family, then his brother, keeping his rent down to a few hundred dollars a month – leaving a much bigger chunk to save. He bought a house in California in 1997, which was pretty good timing, leaving him with a couple hundred thousand in gains. Even though he switched to living alone, raising his expenses somewhat, he’s still saving about $1,400 a month on that salary – a strong accomplishment that has resulted in him having a retirement plan with $100,000 in it, another $100,000 outside the plan in his own investments. To top it off, because he’s a teacher, he gets a pension that will give him a good chunk of money each month (not enough to live on, but a healthy supplement to his savings). One thing I encourage you to look at if you’re following this saving strategy is his budget (which they publish in a little box to the right of the article). It’s a little tight (he’s only spending a little over half his income), but if you start young you probably don’t need to even go that far to have a healthy retirement.

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    3 Responses to “Saving Money on a Teacher’s Salary”

  1. » Great Blog Articles From This Past Week on Consumerism Commentary: A Personal Finance Blog Says:

    [...] Free the Drones writes about saving money on a teacher’s salary. In New York City, teachers’ salaries aren’t too bad [PDF]. [...]

  2. lifetimedrone Says:

    I work in a convenience store, try saving on THAT income.

  3. kneukm03 Says:

    Saving on that income would be really, really tough. You’d pretty much have to live with family to do it, and even then it would only be doable if you’re young and can benefit from compound interest – and are willing to live on a shoestring budget. The best advice I can give you is to try to switch fields to end up in a higher paying job – and save your money to pay for anything it takes to do that (college or junior college costs, training, etc.). Some jobs are easier than others to jump into, and teaching might actually be something to look at – it’s not the highest salary in the world, but it’s a good job that is easier to get into than many others, and most schools still offer pensions. You’d still be a drone for awhile, but not for life.