How Much Does Coffee Really Cost?

About 15 years ago I was in a bookstore and found a book called Start Late, Finish Rich by David Bach. I was intrigued by the title and description on the inside cover, so I bought the book. This book started my interest in personal finance.

I want to be clear, I am not a certified financial planner, a CPA, or an other licensed money manager. Over the last 15 years, however, I’ve spent a great deal of time learning more about personal finance.

How does all this impact the teaching profession? One of the best things we can do is make sure we take care of ourselves. If we are in a better place physically, emotionally, and mentally, we can take better care of our students. There have been a lot of conversations lately about teacher wellbeing. I’m glad to see those conversations starting but rarely see much talk about financial wellbeing for teachers.

There’s basically two main factors of personal finance: money coming in and going out. In Start Late, Finish Rich, David Bach talks about the latte factor. Let’s assume that you buy a latte (or whatever kind of coffee you drink in the morning) and it costs $5 for each cup. That’s $25 each week and $100 each month. All of a sudden, that latte starts to add up. If you forgo your daily coffee, you can find some extra money in your budget.

A CNBC published an article yesterday shares seven other ways to save money. They reminded me of latte-factor-style savings.

  1. Eating out
  2. Phone upgrades
  3. Clothing and apparel
  4. Lottery tickets
  5. Extended warranties
  6. Cable TV
  7. Impulse purchases.

If you take a look where you’re spending your money, there’s a good chance you will find a latte-like way to save. It might not seem like much at first, but those little savings add up over time.

Can Teachers Be Financially Comfortable?

I had a conversation at lunch today with a couple of colleagues about financial wellbeing. It’s an important conversation to have – if not with colleagues, then with a spouse/significant other, or at least with ourselves.

As I’ve mentioned in previous posts, a healthy teacher is better able to take care of students. One important way to take care of our overall health is to ensure that our financial wellbeing is monitored and addressed. Financial insecurity can lead to chronic stress, which can negatively affect mental and physical health – ulcers, digestive issues, migraines, insomnia, anxiety, etc.  

There are many resources out there to help understand finances and improve financial wellness. One that I like, and have personally used, is Dave Ramsey’s baby steps:

  1. Save $1,000 for your starter emergency fund.
  2. Pay off all debt (except the house) using the debt snowball.
  3. Save 3-6 months of expenses in a fully funded emergency fund.
  4. Invest 15% of your household income in retirement.
  5. Save for your children’s college fund.
  6. Pay off your home early.
  7. Build wealth and give.

Dave Ramsey wrote a best-selling book, called The Total Money Makeover, which outlines the baby steps and guides readers to, what he calls, financial peace. It is an incredibly quick read, and can help anybody become more knowledgeable about finances and money. One friend recently told me the book literally changed his life.

I’ve read a number of the books on this topic by a range of authors and financial gurus. The key isn’t necessary whom you are reading but that you are reading and thinking about your financial wellbeing. Two other books I’ve found interesting are The Millionaire Next Door and Start Late, Finish Rich. These two books are wonderful because they apply to the average person, not necessarily a surgeon making $500,000 a year. They, and Dave Ramsey, discuss a common thread: financial health is not correlated to level of income.

It is no secret that teacher’s are not in the top income earners in our country. Should teachers be paid more? Yes, but we can only worry about what we can control. So how do we work with what we have, financially speaking? That’s what some of these resources will help unpack. Most of the authors and gurus boil it down to simple ideas like planning, being intentional with money, and minimizing the amount of debt you have because that means more interest payments.

There are many teachers continually improving their financial wellbeing. In fact, a recent study found that one of the top five professions for millionaires is… wait for it… teachers. (Engineer, accountant, “management,” and attorneys were the other professions in the top five.) If planning and being intentional are some of the bedrocks to financial wellbeing, then who knows how to plan better than teachers?

This study shows that it is possible for teachers to become financial successful. The goal isn’t to become “rich.” The goal is to pay attention to our financial wellbeing, continue to learn about finances, and put ourselves in a position so that money is not a constant stressor which leads to health problems. The goal is to be healthy, so we can all be better teachers!