Do Teachers Make Enough Money? 5th Grade Financial Advisors

We have been learning about financial literacy, that is, how to successfully navigate through the world of money.  Today we are going to do some research into teacher salaries, and will be taking an inside look into a very relevant debate: do teachers in the United States make enough money?  You will be researching different sides of the debate, weighing in on your own opinions, and then creating your own balanced budget for a first year teacher in Austin, Texas.

Before we start, there are some vocabulary words you might want to review, if you don’t remember them.  We will be talking about gross income, net income, expenses, budgets, and taxes.  You’ll read some new words as well, like salary and warranty.  Keep your eyes open for these new vocabulary words!

Earlier this week, we took a look at the minimum wage and learned that working full time at $8 an hour is not enough money to support an adult in Austin, Texas.  We completely understand the debate for creating a higher minimum wage!  This is an issue that we also talked a lot about during the primary elections, as candidates stand on different sides of this argument.

For some more news on the minimum wage debate, take a look at these Newsela articles:

 

Minimum wage is about $8 an hour, but to be generous, we calculated on what we called a “Chipotle wage” of $9 an hour.  (I looked it up and our $9 an hour estimate was actually pretty accurate!  We are geniuses.  Check out the actual stats here.) We quickly learned that this was not enough money to live on, and when we threw a child into the mix, it was obvious that we needed to pick up a second job.  This might look like Ms. Green scribble scrabble, but here are some of the expenses we struggled to include in a budget (your budgets were much prettier than mine, but I forgot to take pictures!):

We made a lot of hard choices, some of you even deciding that it would be better to not own a car, and use a bike or public transportation instead.  We also read about how hard a budget like this can be for a parent, many struggling to even keep their children in diapers.

 

Alright, now on to teachers.  We all agree that teachers are valuable, right?  But are teachers paid accordingly? This is a highly debated topic.  Most teachers you meet will answer, we need to increase teacher wages!  But there are still many skeptics.  This article from The Federalist, titled, “Why We Shouldn’t Increase Teacher Pay,” even argues that teachers are paid too much.  (Ms. Green obviously disagrees with this article…🙄)  Here’s one of my favorite jokes about teaching salaries:

“I’m fed up with teachers and their hefty salary guides. What we need here is a little perspective. If I had my way, I’d pay these teachers myself…I’d pay them babysitting wages.

That’s right…instead of paying these out-rageous taxes, I’d give them $3.00 an hour out of my own pocket. And, I’m only going to pay them for five hours, not coffee breaks. That would be $15.00 a day. Each parent should pay $15.00 a day for these teachers to babysit their children. Even if they have more than one child, it’s still cheaper than private daycare.

Now how many children do they teach a day – maybe twenty? That’s $15.00 X 20 = $300.00 a day.

But remember, they only work 180 days a year! I’m not going to pay them for all those vacations.

$300 X 180 = $54,000. 

I know you teachers will say what about those who have ten years of experience and a master’s degree? Well, maybe (just to be fair) they could get the minimum wage, and instead of just babysitting, they could read the kids a story. We can round that off to about $5.00 an hour, times five hours, times twenty children. $5.00 X 5 X 20.

That’s $500 a day times 180 days. That’s $90,000.”

Here’s why this is a joke…

A first year teacher in the Austin Independent School District, or at UT Elementary, makes about $45,000 gross income per year (pretty different than the $90,000 listed above!).

Previously, we have learned about workers being paid on an hourly rate.  While working an hourly rate, you get paid for each hour that you work.  Teachers are not paid hourly.  Teachers are paid on salary.  Being paid on salary means that you get a flat rate each month or each year, regardless of how many individual hours you work. So, like I said, a first year teacher makes about $45,000 gross income per year.  This comes down to about $3,750 per month gross income.  25% of this income is taken out to pay for social security, taxes, and insurance.  What’s left over is net income, the money you get to take home.

Now that we have this net income figured out, we can start making a budget.  Salaries and budgeting are issues that your parents and teachers (and someday you!) face every day.  How can we pay for all of the things we need to pay for, and still have money left over to save?

Budgeting is something that I have to do every month.  I am constantly checking my bank account to make sure that it’s balanced.  Having a balanced budget means that my expenses don’t exceed my income.

 

Today, you guys are going to help me cut my budget and save money.  The plans you come up with today will actually be used in my life (I am totally using you today, thanks for being my financial advisors!).  Let’s start doing some research and making some choices.

 

Here are the big things that I have to set aside money for each month:

Rent: this is a big one!   I currently spend too much money on rent.  I chose to spend a little extra on rent because 1) I didn’t have a car payment at the time, and 2) it was my first year without roommates so it was important to me to feel safe and close to friends.  I am currently spending about $1,300 on rent, which is not a price I can afford to pay long term.  Let’s do some research to find some alternate options.  Click the following link to explore rent prices in Central East Austin, (the area surrounding our school).

What options can you find that might be less expensive than where I currently live?  Budgeting experts will tell you to spend no more than 30% of your net income on living expenses.  If I want to spend no more than 30% of my net income, how much can I afford to pay for rent?  How far away will I have to live?

Utilities:  This is one of the non-negotiable, really.  I have to pay for water and electricity!  If I’m thrifty about keeping my air conditioning off when it’s unneeded, turning the lights off when I leave, turning the water off while brushing my teeth, etc., I can keep my utility expenses down to about $75.  However, we live in Austin, and it gets hot!  Sometimes, I really need to blast the air-conditioning.  I’m also kind of a princess and sleep better when it’s cold 😁.  So my utility bills more realistically end up at around $100.

Transportation:  I’m locked into a car payment for the next six years.  I pay $200 a month for my car, plus $88 for insurance and about $22-$25 every time I fill up on gas (maybe three times a month).  Remember, the closer I live to work, the less I will spend on gas!  The farther away I live, the more I will have to spend on gas.  The good news is, because I have a new car, all repairs are covered under warranty and I won’t need to spend any money getting things fixed.  A warranty is a guarantee made by a manufacturer to replace or repair your purchase for a certain amount of time.  I spent extra money on an extended warranty, which means that my warranty lasts 7 years instead of the normal 2 years.  This was an additional expense up front, but I think it will save me money in the long run.

Food:  It’s important to me to eat healthy.  I grocery shop and cook every week.  I usually spend about $300 a month on food, but sometimes more if I eat out a lot.  How could I spend less money on food, while still eating healthy?  Unhealthy food tends to be a lot cheaper, which is how a lot of low income families end up eating bad foods.

Here are some Newsela articles on this problem, and what First Lady Michelle Obama is doing about it.

Cable & Internet:  I save money in this area by not paying for cable, which could add on an additional $70 to my bill.  Instead, I pay $33 for wifi each month.  This is the most inexpensive internet I could find.  Without wifi, I wouldn’t be a very effective teacher for you guys!  Wifi is a non-negotiable for me.

 

With all of these expenses piling up, many families do choose to skip paying for internet.  How do you think a lack of internet access at home might affect students’ education?

 

Creede:  How could I not spend money on my puppy?!  Look at this face…

Some months he has more expenses and some months he has less, but on average I probably spend about $60 a month on him.  I saved a lot of money by adopting a dog from the shelter instead of buying a puppy from a breeder.  Buying a new pet can be extremely pricey, but many shelters only charge a small adoption fee and provide additional veterinary support.  Creede’s heart worm treatment, for example, costs almost $500, but Austin Animal Shelter is footing the bill.

 

 

Giving:  Even though I listed this towards the bottom of my list, this is actually the first thing I calculate each month.  Giving back to our communities is incredibly important.  No matter how little we have, we can always make room to give.  Volunteering your time is a great way to give back too.  I have my budget set up to give at least 10% of my salary to charities and my church each month.

Savings:  I’m not very good at saving yet, but maybe you guys can help!  How much money do you think I should be putting into my savings account each month?  Many experts would suggest that at least 15% of your net income should be put into savings.

Miscellaneous Expenses:  This is where all of my extra money goes.  This pays for all of the fun things I like to do with my friends, as well as new clothes and all of those new books for you guys.  I usually don’t end up having much money left over for this category.  This is also the category where I end up overspending, (exceeding my budget), racking up my credit card bill.  😣

As a single person with little debt, supporting only myself and my dog, my salary covers all of my necessities.  How do you think my budget might change if I had a child?  What about two children? What if I had a medical condition or a disability?  Many teachers face these questions every day.  Here’s a video about a teacher who works multiple jobs to make ends meet.

Kory says, “I live with a decent amount of fear all the time, that the bills are not going to get paid, that the kids won’t have what they need, not to mention the things that they want.  I don’t have any other safety-nets, I don’t have the benefit of wealthy parents.  To [think] of a life where I could make enough money to support my family, to feel safe, and then to think about what I would do with that time [that I’m not worrying/driving Lyft], what a better teacher I could be, how much more I could give to my students…it’s heartbreaking to me, because I do see the real effects on kids.”

What do you think about Kory’s quote?  What effects do you think underpaid teachers have on education and on students?

Here’s a video about The Equality Project (TEP) Charter School, where teachers are paid upwards of $125,000.  WHOA!  Do you think other schools might follow their lead?

Here is an interesting comparison of teacher salaries across the world.  How do you think teacher salaries relate to the culture’s value of teachers?

So, what do you think?  Do teachers in America make enough money?  Whether you are in Ms. Green’s class or participating from across the globe, we would love to hear what you think!  Answer our survey and feel free to leave a comment.